OpenAI Denies Reports It Plans to Leave California Amid Restructuring Dispute

OpenAI on Wednesday strongly denied a Wall Street Journal report that it was preparing to relocate out of California, calling the account "a work of fiction" and saying the company has no plans to leave the state.

The company told the Daily Mail that it is "proud to be a California-based company and have no plans to leave," rebutting WSJ reporting that executives had discussed a move as a "last-ditch" option to advance a controversial restructuring. The Journal's story said company leaders considered relocation if state officials further complicated the plan to convert OpenAI's commercial arm into a public benefit corporation controlled in part by its nonprofit parent.

The dispute centers on a plan announced late last year to change the ownership and governance of OpenAI's for-profit entity while creating a public benefit corporation structure. Under the initially proposed model, the nonprofit that founded OpenAI would have relinquished full control of the commercial arm; after criticism, the company said in May it would keep the nonprofit parent in a controlling position. The restructuring has drawn objections from philanthropies, labor groups, AI ethicists, former employees and state attorneys general in California and Delaware, who have raised legal and mission-related concerns.

OpenAI has framed the change as necessary to secure financing and operational capacity. Financial backers have conditioned roughly $19 billion in potential funding on receiving shares in the new for-profit business, according to reporting on the matter. Company executives have warned that a blocked restructuring could imperil plans to expand data-center capacity, develop custom chips and scale research efforts.

The proposal followed internal turmoil at OpenAI in November 2023, when the company's board briefly ousted and then reinstated Chief Executive Sam Altman after a dispute over leadership and strategy. The company announced the restructuring plan in December 2024 and revised elements of it in May amid public backlash and legal scrutiny.

State attorneys general have examined whether the restructuring would violate charitable trust laws because OpenAI's creator is a nonprofit. An OpenAI spokesman told the Wall Street Journal that the company is "working constructively with the offices of the Attorneys General of California and Delaware" and that it hopes to create "one of the best-resourced nonprofits in history." The Journal reported that the prospect of protracted scrutiny by state regulators prompted discussions internally about relocation; OpenAI called those reports unfounded.

Relocating would present practical challenges: much of OpenAI's research staff is based in the San Francisco Bay Area, and moving large numbers of technical employees and research infrastructure would take significant time and resources. If the company were to leave California, it would join a list of technology firms that have shifted headquarters in recent years, including Oracle and Palantir, which cited business and cultural reasons for their moves.

The dispute highlights a broader legal and public debate over how emerging AI companies govern and balance commercial incentives with public-interest commitments. Civic leaders and ethicists who oppose the original restructuring plan have argued it could weaken commitments to open, safe and equitable AI development, while investors and executives have said new governance is needed to attract capital and sustain large-scale technical projects.

OpenAI's statements denying imminent plans to depart California leave unresolved the timeline for a final legal resolution. The company and the state attorneys general continue to exchange information as officials weigh whether the proposed corporate structure complies with state charitable trust laws and other regulatory requirements.