President Bola Tinubu is expected to meet with power generation companies (GenCos) over a mounting N4 trillion debt threatening to cripple Nigeria’s electricity sector, the Minister of Power, Adebayo Adelabu, said on Sunday.

Mr Adelabu, in a statement released by his media aide, Bolaji Tunji, said the meeting with the GenCos would focus on finding a workable solution, (including removing electricity subsidy), to the debt and stabilizing the country’s ailing power sector. He warned of “an impending collapse” in the sector if immediate action is not taken.

“We recognize the urgency of this matter,” Mr Adelabu said. “The government is committed to resolving this debt to stabilize the sector and prevent further crisis.”

He said the federal government would prioritize a “significant” cash payment to the GenCos, with the balance of the N4 trillion to be cleared through promissory notes and other financial instruments within six months. The minister also said the government would implement structural reforms to address operational inefficiencies and push for a fully liberalized market.

“Citizens must pay the appropriate price for the energy consumed,” he said. “The Federal Government will continue to provide targeted subsidies for economically disadvantaged Nigerians, but we must realize that our economy cannot sustain blanket subsidies indefinitely.”

However, the plan is drawing strong criticism from citizens who argue that the rising cost of living has already left households and businesses stretched thin. Following the removal of the petrol subsidy in 2023, inflation soared, eroding earnings and increasing the cost of goods and services. For many Nigerians, electricity subsidy remains the only direct benefit they receive from the government—one now at risk of becoming unaffordable.

There is also skepticism over whether the removal of the electricity subsidy will improve power supply. Critics point to the government’s recent Band A tariff model, under which customers receive 20 hours of electricity and pay a higher rate, as an example of failed promises.

Amid the growing backlash, calls for the government to look inward and reduce the cost of governance have gained momentum. Economist Kalu Aja captured public frustration, arguing that Nigeria’s governance structure is too extravagant to justify further demands from already overburdened citizens.

“If Nigeria can’t afford to maintain electricity tariffs, then the subsidy in the National Assembly, Governors and the Presidency must also be removed,” he said. “Nigeria can’t afford a presidential system of governance with President, VP, Senate and House plus 36 Governors with State Senate and House. Nigeria should revert to a parliamentary system, with Ministers as members of one House, for a start. Citizens alone can’t cut their coats.”

Many Nigerians have echoed this sentiment, protesting the high cost of governance in Nigeria, believed to be among the most expensive in the world.

The GenCos, who were represented at the meeting by Col. Sani Bello (Rtd), chairman of Mainstream Energy Solutions and the Association of Power Generating Companies, noted that persistent liquidity shortfalls have hampered their ability to maintain infrastructure or service loans.

“Without urgent intervention, the entire power ecosystem could collapse,” Bello said.

Kola Adesina, chairman of Egbin Power and First Independent Power Limited, described the situation as a national emergency. He said stable electricity is essential to the survival of homes, industries, and health facilities.

Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, blamed chronic payment defaults, erratic gas supply, and foreign exchange instability for the crisis. She said the depreciation of the naira—from N157 to a dollar in 2013 to N1,600 in 2024—has severely limited the GenCos’ ability to service debt and invest in infrastructure.

“GenCos have borne unsustainable risks from grid failures to unproductive taxes while remaining patriotic,” she said.

President Donald Trump announced via Truth Social his intention to impose a 100% tariff on all movies produced outside the United States and imported into the country, claiming the American film industry is “DYING a very fast death” due to foreign incentives luring filmmakers abroad. He described this as a “national security threat” and “propaganda,” authorizing the Department of Commerce and the U.S. Trade Representative to begin the process. Commerce Secretary Howard Lutnick confirmed action with a post on X, stating, “We’re on it.”

The announcement lacks clarity on implementation, including whether tariffs apply to streaming services, theatrical releases, or how they would be calculated (e.g., production costs or box office revenue). It’s uncertain if the policy targets only foreign companies or includes U.S. studios filming overseas, like Disney’s Avengers: Doomsday or Warner Bros.’ Supergirl: Woman of Tomorrow, both shooting in the UK. Films are intellectual property, not physical goods, making tariff application complex and unprecedented, as services typically face non-tariff barriers like regulations.

Trump’s move follows his broader trade policies, including a 10% universal tariff on goods, 25% tariffs on steel and autos from Canada and Mexico, and a 145% tariff on Chinese imports. The film tariff could disrupt Hollywood, already struggling with a 40% production drop in Los Angeles over the past decade, as countries like Canada, the UK, and Australia offer tax incentives. Industry experts warn of retaliation, with China already reducing U.S. film quotas in April 2025, potentially harming American studios’ global market access.

Critics, including economist Justin Wolfers, argue the policy could backfire, raising costs for studios and consumers while failing to address competitive dynamics like California’s high production costs. Governor Gavin Newsom, criticized by Trump, has proposed tax credits to boost local filming, but some producers, like Randy Greenberg, warn tariffs may increase ticket prices and reduce theater attendance. The Motion Picture Association and major studios have not commented, and Hollywood executives are scrambling for details.

The policy’s impact on independent films, foreign-language cinema, or major franchises shooting abroad remains unclear. Global industry leaders, including Australia’s Tony Burke and New Zealand’s Christopher Luxon, vowed to defend their film sectors. The proposed 100% tariff on imported movies announced by President Trump on May 4, 2025, carries significant implications across economic, cultural, and geopolitical dimensions.

U.S. studios filming abroad e.g., Disney, Warner Bros. may face doubled costs for importing films, potentially raising production budgets. Higher costs could lead to increased ticket prices or streaming subscription fees, reducing consumer demand and theater attendance. Independent films, often reliant on international co-productions, may face financial strain, limiting their U.S. distribution.

Disruption to Hollywood’s Global Operations

Major studios frequently shoot overseas to leverage tax incentives in countries like Canada, the UK, and Australia. Tariffs could force costlier domestic production or reduce international projects, impacting profitability. The U.S. film industry, already down 40% in Los Angeles production over the past decade, may struggle to compete without addressing domestic cost issues like high labor and real estate expenses. Proponents argue tariffs could incentivize domestic filmmaking, creating jobs in the U.S. film industry.

However, reduced international collaboration and higher costs could lead to job losses in sectors like post-production, distribution, and exhibition, especially if global markets retaliate. A 100% tariff could make foreign films, including critically acclaimed works from Europe, Asia, or Latin America, prohibitively expensive, limiting their availability in U.S. theaters and on streaming platforms.

This could reduce cultural diversity in media, impacting audiences and awards circuits like the Oscars, which often celebrate international films. Services like Netflix and Amazon, which rely on global content, may face higher acquisition costs for foreign titles, potentially reducing their catalogs or prioritizing domestic content. Consumers may see a shift toward homogenized content, with less exposure to global perspectives.

Countries like China, which restricted U.S. film quotas in April 2025, may further limit American films’ access to their markets, hurting studios’ global box office revenue (e.g., Avengers earned $1.2 billion overseas). Allies like Canada, the UK, and Australia, with robust film industries, have signaled resistance. Australia’s Tony Burke and New Zealand’s Christopher Luxon vowed to protect their sectors, potentially escalating trade tensions.

Co-productions, common in the industry, could decline as tariffs complicate financing and distribution, weakening U.S. influence in global cinema. Countries may impose reciprocal tariffs or subsidies, further isolating U.S. films from international markets. Films are intellectual property, not physical goods, making tariff application legally and logistically complex. It’s unclear whether tariffs apply to theatrical releases, streaming, or both, or how they’d be calculated (e.g., production costs or revenue).

California Governor Gavin Newsom has questioned Trump’s authority to impose such tariffs, suggesting potential legal challenges from states or industry groups. The Motion Picture Association and major studios, though silent so far, may lobby against the policy, as it threatens their global business models. Independent distributors and theater chains, already struggling post-COVID, could face existential risks if content costs soar.

Tariffs may encourage investment in U.S. film infrastructure, but without competitive tax incentives (like Georgia’s 30% credit), studios may hesitate to relocate. High costs in California could push production to other states, reshaping regional economies. Rival film industries in China, India, or Europe could gain market share if U.S. films lose global competitiveness. Streaming giants may shift production to countries with lower costs, bypassing U.S. tariffs but reducing domestic economic benefits.

Uncertainties

The policy’s scope (e.g., exemptions for U.S. studios abroad) and enforcement timeline remain undefined, creating industry uncertainty. Consumer behavior is unpredictable—higher prices could accelerate cord-cutting or piracy, further straining the industry. Retaliatory measures from trade partners could escalate into broader economic conflicts, given Trump’s other tariff policies (e.g., 25% on Canada/Mexico, 145% on China).

OpenAI, the artificial intelligence pioneer behind ChatGPT, announced on Monday that its nonprofit arm will retain control of its for-profit division, abandoning plans to fully transition to a for-profit model.

The decision, detailed in a blog post by Board Chairman Bret Taylor, follows intense scrutiny from civic leaders, regulators, and critics, including billionaire co-founder Elon Musk and Meta.

“We made the decision for the nonprofit to retain control of OpenAI after hearing from civic leaders and engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California,” the company stated.

As OpenAI restructures its for-profit arm into a public benefit corporation (PBC), valued at $300 billion after a record $40 billion funding round, the move balances its mission to advance AI for humanity with the capital demands of a competitive industry.

The move marks a significant reversal from its September 2024 plan to shed nonprofit control and adopt a traditional for-profit structure, driven by the need for substantial capital to train advanced AI models. CEO Sam Altman, addressing employees and investors, explained the original rationale.

“Instead of our current complex capped-profit structure—which made sense when it looked like there might be one dominant AGI effort but doesn’t in a world of many great AGI companies—we are moving to a normal capital structure where everyone has stock,” he said.

The shift aimed to simplify governance and attract investors, as training models like o3 and o4-mini, launched in April 2025, can cost billions.

However, the path to full for-profit status proved fraught with legal and public obstacles. “The TLDR is that with the structure we’re contemplating, the not-for-profit will remain in control of OpenAI,” Taylor stated in the blog post, indicating that the nonprofit will remain a significant shareholder in the PBC, overseeing its operations to ensure alignment with its mission of ensuring artificial general intelligence (AGI) benefits all of humanity.

Altman, in a virtual press briefing, expressed gratitude for the feedback that shaped the decision.

“We’re very grateful to all the people that have constructively engaged with us, talking about different ways we could do this, and I’m very happy that we’ve made the decision for the nonprofit to stay in control,” he said.

The restructuring into a PBC allows OpenAI’s for-profit arm to prioritize societal benefits alongside shareholder value, maintaining nonprofit oversight while enabling access to capital markets. This hybrid model addresses investor requirements from the March 2025 funding round, which included a clause allowing refunds if the for-profit transition wasn’t completed within two years.

“OpenAI’s transition will satisfy the requirements accompanying the investments made by SoftBank and other investors,” a person familiar with the matter told BI, ensuring the $40 billion round, led by SoftBank, Thrive Capital, and others, remains secure.

Origins in Public Interest, Driven by Capital Needs

Founded in 2015 as a nonprofit by Sam Altman, Elon Musk, Greg Brockman, and others, OpenAI aimed to develop AI safely and ethically, as outlined on its website. In 2019, it adopted a “capped-profit” model, creating a for-profit subsidiary to fund research while retaining nonprofit control, a structure Altman later described as complex in a world with multiple AGI competitors.

The 2023 leadership crisis, when the nonprofit board ousted Altman over communication breakdowns, only to reinstate him after employee and investor pressure, exposed governance vulnerabilities. The episode, resolved in five days, highlighted the tension between mission and commercial ambitions, setting the stage for the 2024 for-profit push.

The September 2024 announcement to transition fully to for-profit status sparked immediate backlash. Converting assets, determining equity for Altman and investors, redefining governance, and amending OpenAI’s Delaware incorporation required navigating a legal minefield. Public criticism was fierce, led by Musk, who left OpenAI in 2018 and founded rival xAI in 2023. Musk filed multiple lawsuits in 2024, alleging OpenAI breached its nonprofit mission by prioritizing profit, aiming to halt the restructuring.

Meta, a competitor via its AI division, also opposed the move. In a December 2024 letter to the California Attorney General, Meta accused OpenAI of “taking advantage” of its nonprofit status to raise funds, urging regulators to block the transition. The California and Delaware Attorney General offices engaged with OpenAI, with their input proving pivotal.

OpenAI cited “Engaging in constructive dialogue with the offices of the Attorney General of Delaware and the Attorney General of California” as a key driver of the nonprofit retention decision.

The AI industry’s capital-intensive nature drove OpenAI’s initial for-profit push. Training advanced models like o3, which supports multimodal tasks like image analysis, demands billions, as Altman noted in 2024. Competitors like Anthropic, backed by Amazon’s $4 billion, and Google’s DeepMind, funded internally, have raised significant sums, while xAI leverages Musk’s resources.

However, OpenAI’s leadership is underscored by the $300 billion valuation, with ChatGPT boasting 200 million weekly active users and enterprise solutions like ChatGPT Enterprise gaining traction.