A coalition of labor and nonprofit organizations is petitioning California Attorney General Rob Bonta to block OpenAI from becoming a for-profit entity, citing concerns over the protection of its charitable assets and mission.
A group of organizations, including nonprofits like LatinoProsperity and labor groups like the California Teamsters, are urging Attorney General Bonta to intervene in OpenAI’s plans to transition into a public-benefit corporation. OpenAI announced its intention to make this transition in 2024 and has a two-year deadline to complete it, or risk having the funds it raised become debt.
The coalition’s primary concerns are that OpenAI has “failed to protect its charitable assets” and is actively “subverting its charitable mission to advance safe artificial intelligence.” OpenAI was initially established as a nonprofit research organization focused on studying AI, but it transitioned into a for-profit company overseen by a nonprofit in 2019. This structure is legally permitted in California.
The group’s petition asserts that OpenAI’s decision to pursue a new structure is driven by a desire to benefit “a handful of corporate investors and high-level employees” rather than furthering its original mission. They claim that the potential benefits of AI, including “untold profits and control over what may become powerful world-altering technologies,” are being prioritized for a select few.
OpenAI has responded to these concerns, stating that its Board “has been very clear that we intend to strengthen the non-profit so that it can deliver on its mission for the long term.” The company emphasized that it is not abandoning its nonprofit aspect, saying, “We’re not selling it, we’re doubling down on its work.” OpenAI also announced the creation of an advisory commission to seek input from leaders of community-based organizations on how it can help them achieve their missions.
The company’s justification for transitioning to a for-profit entity is to raise more capital. Currently, OpenAI faces limitations on the returns it can offer investors, which would be lifted if it were to become a for-profit company. Additionally, as a for-profit entity, OpenAI would no longer be constrained by the demands of a nonprofit board that prioritizes the risks associated with its breakthroughs over their utility as consumer products.
OpenAI’s board has previously taken steps to control the for-profit side of the organization, including the brief removal of Sam Altman in 2023. The petitioners believe that such actions demonstrate the need for the Attorney General to intervene to protect the public’s interest.
The petition is not an isolated effort; it joins other attempts to stop OpenAI’s conversion, including a letter from Meta claiming that OpenAI’s transition would “flout the law,” and Elon Musk’s attempt to buy the company.
