Labor and nonprofit coalition calls on California AG to stop OpenAI from going for-profit

A group of organizations, including nonprofits like LatinoProsperity and labor groups like the California Teamsters, are petitioning California Attorney General Rob Bonta to stop OpenAI from becoming a for-profit entity, The Los Angeles Times reports. OpenAI announced plans to transition to a public-benefit corporation in 2024, and reportedly has two years to pull it off or risk a large portion of the money its raised become debt.

The group’s primary concerns are that OpenAI “failed to protect its charitable assets” and is actively “subverting its charitable mission to advance safe artificial intelligence.” OpenAI started as a nonprofit research organization studying AI, but transitioned to a for-profit company that’s overseen and run by a nonprofit in 2019.

That structure is legally allowed in the state of California, but the group’s petition claims that OpenAI’s decision to pursue a new structure is driven by a desire not to further its mission, but to provide “AI’s benefits — the potential for untold profits and control over what may become powerful world-altering technologies — to a handful of corporate investors and high-level employees.”

Engadget has reached AG Bonta for comment on the petition and will update this article if we hear back.

“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,” OpenAI told Engadget. “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.”

OpenAI’s primary justification for going for-profit is to raise more money. Currently, there’s nothing stopping OpenAI from convincing more people to invest, but as Engadget reported in February, it is limited in the returns it can offer investors. It wouldn’t have those limitations as a for-profit company, nor would it have to heed the demands of a nonprofit board focused on the risks of the company’s breakthroughs, rather than their utility as consumer products.

OpenAI’s board has attempted to reign in the for-profit side over the years, like pushing out Sam Altman in 2023, before he was rehired and the board was filled with new members more friendly to OpenAI’s for-profit goals. The organizations behind the petition believe that moves like that are enough justification for the AG to step in to protect the public’s interest.

The petition joins other attempts to stop OpenAI’s conversion, like Meta’s letter to Bonta claiming that OpenAI’s transition to a for-profit would “flout the law,” and Elon Musk’s attempt to buy the company.

Update 8:24PM ET: Added comment from OpenAI.