Coalition opposes OpenAI shift from nonprofit roots

A coalition of experts, including former OpenAI employees, has voiced strong opposition to the company’s shift away from its nonprofit roots.

In an open letter addressed to the Attorneys General of California and Delaware, the group – which also includes legal experts, corporate governance specialists, AI researchers, and nonprofit representatives – argues that the proposed changes fundamentally threaten OpenAI’s original charitable mission.   

OpenAI was founded with a unique structure. Its core purpose, enshrined in its Articles of Incorporation, is “to ensure that artificial general intelligence benefits all of humanity” rather than serving “the private gain of any person.”

The letter’s signatories contend that the planned restructuring – transforming the current for-profit subsidiary (OpenAI-profit) controlled by the original nonprofit entity (OpenAI-nonprofit) into a Delaware public benefit corporation (PBC) – would dismantle crucial governance safeguards.

This shift, the signatories argue, would transfer ultimate control over the development and deployment of potentially transformative Artificial General Intelligence (AGI) from a charity focused on humanity’s benefit to a for-profit enterprise accountable to shareholders.

Original vision of OpenAI: Nonprofit control as a bulwark

OpenAI defines AGI as “highly autonomous systems that outperform humans at most economically valuable work”. While acknowledging AGI’s potential to “elevate humanity,” OpenAI’s leadership has also warned of “serious risk of misuse, drastic accidents, and societal disruption.”

Co-founder Sam Altman and others have even signed statements equating mitigating AGI extinction risks with preventing pandemics and nuclear war.   

The company’s founders – including Altman, Elon Musk, and Greg Brockman – were initially concerned about AGI being developed by purely commercial entities like Google. They established OpenAI as a nonprofit specifically “unconstrained by a need to generate financial return”. As Altman stated in 2017, “The only people we want to be accountable to is humanity as a whole.”

Even when OpenAI introduced a “capped-profit” subsidiary in 2019 to attract necessary investment, it emphasised that the nonprofit parent would retain control and that the mission remained paramount. Key safeguards included:   

• Nonprofit control: The for-profit subsidiary was explicitly “controlled by OpenAI Nonprofit’s board”.   
• Capped profits: Investor returns were capped, with excess value flowing back to the nonprofit for humanity’s benefit.   
• Independent board: A majority of nonprofit board members were required to be independent, holding no financial stake in the subsidiary.   
• Fiduciary duty: The board’s legal duty was solely to the nonprofit’s mission, not to maximising investor profit.   
• AGI ownership: AGI technologies were explicitly reserved for the nonprofit to govern.

Altman himself testified to Congress in 2023 that this “unusual structure” “ensures it remains focused on [its] long-term mission.”

A threat to the mission?

The critics argue the move to a PBC structure would jeopardise these safeguards:   

• Subordination of mission: A PBC board – while able to consider public benefit – would also have duties to shareholders, potentially balancing profit against the mission rather than prioritising the mission above all else.   
• Loss of enforceable duty: The current structure gives Attorneys General the power to enforce the nonprofit’s duty to the public. Under a PBC, this direct public accountability – enforceable by regulators – would likely vanish, leaving shareholder derivative suits as the primary enforcement mechanism.   
• Uncapped profits?: Reports suggest the profit cap might be removed, potentially reallocating vast future wealth from the public benefit mission to private shareholders.   
• Board independence uncertain: Commitments to a majority-independent board overseeing AI development could disappear.   
• AGI control shifts: Ownership and control of AGI would likely default to the PBC and its investors, not the mission-focused nonprofit. Reports even suggest OpenAI and Microsoft have discussed removing contractual restrictions on Microsoft’s access to future AGI.   
• Charter commitments at risk: Commitments like the “stop-and-assist” clause (pausing competition to help a safer, aligned AGI project) might not be honoured by a profit-driven entity.  

OpenAI has publicly cited competitive pressures (i.e. attracting investment and talent against rivals with conventional equity structures) as reasons for the change.

However, the letter counters that competitive advantage isn’t the charitable purpose of OpenAI and that its unique nonprofit structure was designed to impose certain competitive costs in favour of safety and public benefit. 

“Obtaining a competitive advantage by abandoning the very governance safeguards designed to ensure OpenAI remains true to its mission is unlikely to, on balance, advance the mission,” the letter states.   

The authors also question why OpenAI abandoning nonprofit control is necessary merely to simplify the capital structure, suggesting the core issue is the subordination of investor interests to the mission. They argue that while the nonprofit board can consider investor interests if it serves the mission, the restructuring appears aimed at allowing these interests to prevail at the expense of the mission.

Many of these arguments have also been pushed by Elon Musk in his legal action against OpenAI. Earlier this month, OpenAI counter-sued Musk for allegedly orchestrating a “relentless” and “malicious” campaign designed to “take down OpenAI” after he left the company years ago and started rival AI firm xAI.

Call for intervention

The signatories of the open letter urge intervention, demanding answers from OpenAI about how the restructuring away from a nonprofit serves its mission and why safeguards previously deemed essential are now obstacles.

Furthemore, the signatories request a halt to the restructuring, preservation of nonprofit control and other safeguards, and measures to ensure the board’s independence and ability to oversee management effectively in line with the charitable purpose.   

“The proposed restructuring would eliminate essential safeguards, effectively handing control of, and profits from, what could be the most powerful technology ever created to a for-profit entity with legal duties to prioritise shareholder returns,” the signatories conclude.

See also: How does AI judge? Anthropic studies the values of Claude

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