A coalition of organizations, including nonprofits such as LatinoProsperity and labor groups like the California Teamsters, has submitted a petition to California Attorney General Rob Bonta in an effort to prevent OpenAI from transitioning into a for-profit entity, as reported by The Los Angeles Times. OpenAI had announced its intention to shift to a public-benefit corporation by 2024, with a two-year window to accomplish this goal or risk accumulating debt from the funds it has raised.
The group’s main concerns revolve around OpenAI’s alleged failure to safeguard its charitable assets and its purported deviation from its charitable mission of advancing safe artificial intelligence. Originally founded as a nonprofit research organization focusing on AI studies, OpenAI made the switch to a for-profit entity overseen by a nonprofit in 2019.
While this organizational structure is permissible under California law, the petition argues that OpenAI’s pursuit of a new framework is motivated not by a commitment to its mission, but by a desire to channel the benefits of AI—such as potential profits and influence over transformative technologies—towards a select group of corporate investors and high-ranking employees.
Engadget has sought comments from OpenAI and AG Bonta regarding the petition and will update the article accordingly. OpenAI’s rationale for transitioning to a for-profit model is primarily to raise additional funds. Currently, the organization faces restrictions in attracting new investors due to limitations on returns it can offer. As highlighted in a February report by Engadget, these constraints would be eliminated in a for-profit setup, freeing OpenAI from the oversight of a nonprofit board primarily concerned with the risks posed by the company’s innovations rather than their commercial viability.
Over the years, OpenAI’s board has made efforts to curb the influence of the for-profit faction within the organization, including the ousting and subsequent rehiring of Sam Altman in 2023, alongside the appointment of new board members aligned with OpenAI’s for-profit objectives. The groups behind the petition view such actions as sufficient grounds for the Attorney General to intervene in order to safeguard the public’s interests.
The petition adds to other initiatives aimed at halting OpenAI’s transition, such as Meta’s communication to Bonta asserting that the move towards for-profit status would violate the law, as well as Elon Musk’s attempted acquisition of the company. This article was initially published on Engadget at .
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