OpenAI, a company initially structured as a non-profit with the ambitious goal of ensuring artificial general intelligence (AGI) benefits all of humanity, finds itself at a crossroads. Its unusual structure, prioritizing mission over shareholder value, has led to significant internal conflict and a proposed restructuring that’s raising serious legal and ethical questions.
The recent turmoil, including the brief firing and reinstatement of CEO Sam Altman, highlighted the inherent tension between OpenAI’s idealistic mission and the pressures of its massive valuation (over $300 billion). This has led to a proposal to transition into a for-profit public benefit corporation, a move that a new open letter, signed by legal scholars, Nobel laureates, and former OpenAI employees, argues is both illegal and a terrible idea.
The core of their argument is simple: the nonprofit’s control over OpenAI’s governance is invaluable, exceeding any potential monetary gain from a sale. Selling this control would violate the nonprofit’s fiduciary duty to its beneficiaries – all of humanity. They contend that a large sum of money pales in comparison to the power to guide the development and ethical considerations of the world’s leading AI lab.
This isn’t just a critique of a bad business decision; it’s a legal challenge. The letter calls upon the attorneys general of California and Delaware to intervene and prevent the restructuring. The authors argue that OpenAI’s unique mission—to ensure AGI is safe and beneficial to all—is fundamentally incompatible with the profit-driven motives of a typical for-profit company.
OpenAI’s origins in 2015 were rooted in a deep concern about the existential risks of unchecked AI development. The founders deliberately chose a non-profit structure to shield the company from the pressures of maximizing shareholder returns, believing this was crucial for prioritizing safety and ethical considerations. Even when OpenAI adopted a “capped for-profit” structure in 2019, allowing for investor funding, the nonprofit board retained ultimate control, emphasizing that the mission remained paramount.
The open letter highlights OpenAI’s own past statements, demonstrating a consistent commitment to prioritizing humanity’s benefit over profit. The authors argue that a transition to a for-profit entity, even a public benefit corporation, would inevitably shift the focus towards financial gain, jeopardizing the very mission OpenAI was founded to uphold. Public benefit corporations, while aiming to balance profit and public good, often lack the effective enforcement mechanisms to ensure accountability to the public interest.
The letter’s authors express concern that the current board, facing immense pressure, may be ill-equipped to navigate this complex situation. They emphasize the board’s responsibility to uphold its fiduciary duty to humanity, even if it means making difficult decisions that might not be immediately popular. This situation places a heavy burden on the attorneys general of California and Delaware, who now have the power to shape the future of AI development.
The proposed transition raises profound questions about the balance between innovation, profit, and the ethical considerations surrounding the development of advanced AI. The outcome will not only affect OpenAI’s future but also serve as a precedent for the governance of other powerful AI organizations. The future of AGI, and perhaps humanity itself, may depend on the decisions made in the coming months.
