Alliance against the restructuring of OpenAI

OpenAI wants to change from a non-profit company to a profit-oriented company. One of the reasons for this is the investment required and the need of investors to get something back. This is only possible to a limited extent with a non-profit company. However, resistance to the project is now growing.

The public prosecutors in California and Delaware have taken a close look at OpenAI's plans. They are said to have been asked to intervene by several groups—including resident philanthropists, other non-profit organizations, and employee associations, according to a report in the Wall Street Journal (WSJ). It concerns potential violations of the law on charitable foundations. So far, OpenAI controls one such foundation. According to the article, the public prosecutor's offices can take legal action against the conversion or demand financial compensation for the restructuring.

It would be a bitter loss for OpenAI if the conversion were to fail. Investors could then demand their money back. This in turn could damage the construction of the gigantic data centers that OpenAI needs for the further development of the AI models. OpenAI is therefore said to already be in talks with regulators. One compromise is that a nonprofit organization will retain control over the planned commercial enterprise.

Criticism of OpenAI's plans

Elon Musk and Mark Zuckerberg were among the first critics of OpenAI's plans. While Musk tried to legally prevent OpenAI—and failed with his rather absurd accusations—Zuckerberg announced his concerns in a public letter. He speaks of a “seismic quake” in Silicon Valley. The concern: other start-ups could also launch as non-profits, raise money from investors, who in turn could tax this massively as a charity. However, if the startup is successful, the money is taken back out of the company thanks to the conversion. For charities, it has to be used for charitable purposes.

One thing that also makes prosecutors uncomfortable is OpenAI's approach to getting its products out there. Suicides allegedly linked to ChatGPT suggest that OpenAI placed less emphasis on the security of its products and instead rushed them to market.

(emw)