Former OpenAI Staff Seek To Block For-Profit Conversion

AI pioneer OpenAI is facing more unwelcome headlines over its restructuring into a “for-profit benefit corporation” – a move that is being actively opposed by AI rival Elon Musk.

The Associated Press reported that ten former employees of OpenAI are asking the top law enforcement officers in California and Delaware to stop the firm from shifting control of its AI tech from a non-profit charity to a for-profit business.

It was in September 2024 when OpenAI confirmed it was restructuring itself into “for-profit benefit corporation” – a significant move away from its “non-profit” roots.

Letter to AGs

According to the Associated Press report, the former OpenAI staffers are concerned about what happens if the ChatGPT maker fulfils its ambition to build AI that outperforms humans, but is no longer accountable to its public mission to safeguard that technology from causing grievous harms.

“Ultimately, I’m worried about who owns and controls this technology once it’s created,” Page Hedley, a former policy and ethics adviser at OpenAI, was quoted as saying in an interview with The Associated Press.

Hedley reportedly worked at OpenAI for two years between 2017 and 2018.

AP noted that Hedley and nine other ex-OpenAI workers sent a letter this week to the democrat state attorneys general in both California and Delaware.

The coalition is reportedly asking California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings to use their authority to protect OpenAI’s charitable purpose and block its planned restructuring.

OpenAI is incorporated in Delaware, but operates out of San Francisco.

OpenAI response

OpenAI was quoted by AP as saying in response that “any changes to our existing structure would be in service of ensuring the broader public can benefit from AI.” It said its for-profit will be a public benefit corporation, similar to other AI labs like Anthropic and tech billionaire Elon Musk’s xAI, except that OpenAI will still preserve a non-profit arm.

“This structure will continue to ensure that as the for-profit succeeds and grows, so too does the nonprofit, enabling us to achieve the mission,” the company reportedly said in a statement.

The letter is the second petition to state officials this month, AP noted.

The last came from a group of labour leaders and non-profits focused on protecting OpenAI’s billions of dollars of charitable assets.

Meanwhile AP noted that some of the signatories of this week’s letter support Musk’s lawsuit, Hedley reportedly said others are “understandably cynical” because Musk also runs his own rival AI company (xAI).

The signatories include two Nobel-winning economists, Oliver Hart and Joseph Stiglitz, as well as AI pioneers and computer scientists Geoffrey Hinton, who won last year’s Nobel Prize in physics, and Stuart Russell.

“I like OpenAI’s mission to ‘ensure that artificial general intelligence benefits all of humanity,’ and I would like them to execute that mission instead of enriching their investors,” Hinton was quoted as saying in a statement Wednesday. “I’m happy there is an effort to hold OpenAI to its mission that does not involve Elon Musk.”

Elon Musk

OpenAI’s move is of course being directly opposed by an AI rival – namely Elon Musk.

Elon Musk had initially sued OpenAI in March 2024 for breach of contract, alleging the firm was no longer following its original non-profit principles.

OpenAI then issued a very public and point by point rebuttal of Musk’s allegations, by directly comparing them to Musk’s own words contained within his own emails.

Musk abruptly withdrew his original lawsuit without explanation in June 2024, a day before a judge was due to rule on OpenAI’s request for it to be dismissed.

But in August 2024 Musk filed a “more forceful” lawsuit, alleging that that OpenAI and its co-founders Sam Altman and Greg Brockman had gone against the company’s founding principles by prioritising commercial interests over the public good.

In December 2024 Musk asked a federal court for an injunction to stop OpenAI from converting into a full for-profit business.

Then in February Elon Musk and a group of investors offered about $97.4 billion to buy the non-profit behind OpenAI.

OpenAI CEO Sam Altman immediately stated Musk’s offer was “ridiculous”, and “the company is not for sale”.

“Altman also noted that the ‘offer’ was “another one of his (Musk’s) tactics to mess with us,” and he had not paid any attention to it, as it “doesn’t matter.”

Elon Musk then claimed he would withdraw his $97.4 billion offer to buy the non-profit behind OpenAI, but only it drops its plan to convert into a for-profit operation.

In March a federal judge denied Elon Musk’s request for a court order blocking OpenAI from converting itself to a for-profit company, but said she could expedite a trial to consider Musk’s claims against the ChatGPT maker and its CEO.

Earlier this month OpenAI announced that it is now counter suing Elon Musk, and posted on X (formerly Twitter), that “Elon’s nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit.”