Calls Grow for OpenAI to Make Good on Its Promises to Serve Public Good

More than 50 California labor and nonprofit organizations are asking Attorney General Rob Bonta to make sure OpenAI properly accounts for the public good as it seeks to transition from a nonprofit to a for-profit company.

“Artificial intelligence institution OpenAI, Inc. is a nonprofit entity that has failed to protect its charitable assets, allowing these charitable assets to be diverted for private profit and subverting its charitable mission to advance safe artificial intelligence,” reads the letter, released on Wednesday. “Petitioners request that the Attorney General act now in the instant case to again protect billions of dollars that are under threat as profit-driven hunger for power yields conflicts of interest.”

OpenAI’s conversion bid was launched to cash in on tens of billions of dollars promised by the SoftBank Group, contingent on OpenAI transforming itself into a for-profit corporation.

“As we enter 2025, we will have to become more than a lab and a startup — we have to become an enduring company,” the company wrote in a blog post last December. “Our plan is to transform our existing for-profit into a Delaware Public Benefit Corporation⁠ (PBC) with ordinary shares of stock and the OpenAI mission as its public benefit interest. The PBC is a structure⁠ used⁠ by⁠ many⁠ others⁠ that requires the company to balance shareholder interests, stakeholder interests, and a public benefit interest in its decision-making. It will enable us to raise the necessary capital with conventional terms like others in this space.”

It’s a controversial deal, and the subject of at least one lawsuit, from Elon Musk.

But Fred Blackwell, CEO of the San Francisco Foundation, said he just wants OpenAI to follow through on its original promise to benefit humanity. “We are not opposed to any conversion of nonprofit to for-profit. Nor are we wagging our fingers around the good or bad of AI,” said Blackwell, who heads one of the largest community foundations in the country. “We really just want to make sure that the assets are properly accounted for in this conversion. And that it’s an independent entity that comes out the other end.”

In response to the letter, an Open AI spokesman wrote, “Our 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. We’re not selling it, we’re doubling down on its work. We look forward to the input and advice from leaders who have experience in community-based organizations on how we can help them achieve their missions, as recently announced by the creation of our advisory Commission.”

The AG’s office is already investigating. In a letter sent to the ChatGPT maker last December, Deputy Attorney General Christopher Lamerdin cited clauses in OpenAI’s articles of incorporation under which “OpenAI’s assets are irrevocably dedicated to its charitable purpose.”

Samuel Altman, CEO of OpenAI, testified during a Senate Judiciary Subcommittee on Privacy, Technology, and the Law oversight hearing on AI in 2023.

At the time, Altman urged U.S. senators to pass laws to force accountability from the big players like Amazon, Google and OpenAI investor Microsoft. “There needs to be incredible scrutiny on us and our competitors,” Altman said. More recently, OpenAI has increased spending on lobbying Congress sevenfold and, for the first time, hired lobbyists to oppose bills to regulate AI in Sacramento.

A state bill (AB 501) that would have blocked the conversion has been amended to focus on aircraft liens instead. “In the process of developing the legislation and doing the due diligence, it was determined that due to the complexity of the policy, additional time and resources to vet it and gather input were necessary,” David Burruto, district director for Assemblymember Diane Papan (D-San Mateo), wrote KQED.

“You have to smell lobbyists behind the scene trying to cut it down in some way or another,” said Gary Marcus, a leading AI expert, who testified to the Senate sitting next to Altman. He’s also written a blog post objecting to the gut-and-amend of AB 501. “He said he was for regulation. And then, OpenAI has been lobbying behind the scenes against many regulations. So there’s a long history of this company making promises that I don’t think really have anything to do with reality. I’m not sure they ever meant them.”