OpenAI executives are reportedly weighing the possibility of relocating the company out of California, as political resistance mounts against its plan to transition from a nonprofit to a for-profit entity, according to The Wall Street Journal. Despite these discussions, OpenAI has publicly stated that it currently has no plans to leave the state.
The pushback is significant. California’s attorney general has launched an investigation into whether OpenAI’s restructuring violates state charitable trust laws. At the same time, a coalition of nonprofits, labor organizations, philanthropic groups, and even rival tech giant Meta is challenging the company’s bid to convert.
At stake is roughly $19 billion in funding tied to the restructuring. If OpenAI fails to complete the transition, investors could pull out a move that would be financially devastating for the maker of ChatGPT.
Relocating the company would be particularly notable given CEO Sam Altman’s deep roots in the Bay Area. Altman has long been an influential figure in San Francisco, serving on Mayor Daniel Lurie’s transition team after his election last year. He also owns multiple properties in the region, including at least four homes in San Francisco and another in Napa Valley.
However, any move would be fraught with challenges. OpenAI’s research talent is heavily concentrated in San Francisco, and shifting operations elsewhere would disrupt the company’s core strengths at a time when competition for AI expertise is at an all-time high.
For now, OpenAI continues to work with attorneys general in both California and Delaware as it navigates the restructuring process. But the regulatory pressure adds to an already difficult landscape, as the company faces intense rivalry in the global race for AI innovation and talent.
