As OpenAI transitions into a for-profit business, the fate of its corporate restructuring hangs in the balance, with activists and advocates pushing for greater transparency and accountability to ensure its mission to benefit all of humanity with AI remains prioritized.
The Battle Over OpenAI’s Corporate Restructuring
OpenAI, one of the world’s most powerful artificial intelligence companies, is at the center of a heated debate over its corporate restructuring. The company, which was founded in 2015 as a nonprofit with the goal of developing AI systems that are highly capable and broadly helpful, has recently announced plans to transition into a more conventional for-profit business.
OpenAI is a research organization focused on developing and promoting friendly AI.
Founded in 2015, the company has made significant advancements in natural language processing, computer vision, and robotics.
Its flagship product, GPT-3, is a highly advanced language model capable of generating human-like text.
OpenAI's mission is to ensure that 'AI benefits humanity while minimizing its risks.'
The organization collaborates with leading researchers and institutions to advance the field of artificial intelligence.
The move has sparked concerns among activists, including Orson Aguilar, who fear that the shift will financially harm working-class communities and neglect OpenAI’s stated mission to benefit all of humanity with AI. “valuing OpenAI’s nonprofit entity even a penny short of its fair market worth would be unlawful”, Aguilar, who is leading a coalition of advocacy groups in their efforts to influence OpenAI’s future, argues.
The Concerns Surrounding the Restructuring
OpenAI’s plans to transition into a public-benefit corporation have raised concerns about the potential impact on the nonprofit sector. Some members of Aguilar‘s coalition are worried that the company’s for-profit arm could undermine the integrity of the nonprofit sector as a whole, making donors reluctant to contribute if they feel that money earmarked for the public good could be peeled off into for-profit pursuits.
The California attorney general‘s office has been investigating the matter, but so far, few details have been released. Aguilar and his coalition are pushing for greater transparency and accountability from OpenAI, arguing that the company must prioritize its mission to benefit all of humanity with AI over profits.
A History of Nonprofit Conversions
The issue of nonprofit conversions is not new. In the 1990s, dozens of nonprofit hospitals and health insurance giants across the country converted into for-profit companies, aiming to better compete in an era of emerging treatments and new technologies. However, this process has often resulted in executives boosting payouts for themselves while hollowing out funding for affiliated philanthropic entities.
Nonprofit conversions refer to the process of changing a nonprofit organization's tax-exempt status.
This can occur when a nonprofit ceases operations, merges with another entity, or is dissolved by its board.
According to IRS data, over 50% of nonprofits dissolve within three years of formation.
The most common reasons for dissolution include lack of funding and ineffective governance.
Aguilar and his coalition are drawing on this history to inform their efforts to influence OpenAI’s future. They have commissioned a legal memo that reiterated the power of the attorney general over the irrevocable status of charitable funds and are working with industry experts to develop recommendations for how OpenAI can prioritize its mission to benefit all of humanity with AI.
The Advisory Commission
In April, OpenAI announced the formation of an advisory commission, which will provide recommendations on how the company should spend its charitable funds and distribute its technology to other nonprofits. The commission includes luminaries from the philanthropic world, such as Jack Oliver, former media executive Monica Lozano, and 95-year-old labor activist Dolores Huerta.
However, “some members have little experience using AI themselves”, Aguilar is skeptical of the commission’s efforts. Ross, a retired former adviser to several California governors, says that he wants the commission to focus on both governance and spending issues, but acknowledges that it will be an incomplete report if they don’t speak to these issues.
The Stakes
The outcome of this battle over OpenAI’s corporate restructuring has enormous consequences for civic society and marginalized and underserved communities. If OpenAI is able to prioritize its mission to benefit all of humanity with AI over profits, it could have a profound impact on the future of artificial intelligence development and deployment. However, if the company prioritizes profits over its mission, it could undermine the integrity of the nonprofit sector and harm working-class communities.
Artificial intelligence (AI) refers to the development of computer systems that can perform tasks that typically require human intelligence, such as visual perception, speech recognition, and decision-making.
AI has numerous applications in industries like healthcare, finance, and transportation, improving efficiency and accuracy.
According to a report by Gartner, AI is expected to generate $3.9 trillion in business value by 2023, with the majority coming from increased productivity and reduced costs.
As the debate continues, one thing is clear: the fate of OpenAI’s corporate restructuring will have significant implications for the future of AI and its impact on society.
