Coalition Opposes OpenAI’s Shift from Nonprofit Roots

A cross-disciplinary coalition of technologists, legal scholars, and corporate governance experts—including former OpenAI staff—has raised urgent concerns about the artificial intelligence pioneer’s evolving corporate structure, warning that a critical safeguard for humanity’s future could be compromised.

The watchdogs detailed their alarm in an open letter directed toward the attorneys general of California and Delaware, highlighting stark deviations from the organization’s founding charter. The missive underscores “serious legal and ethical risks” as OpenAI presses forward with plans to convert its primary operating entity into a Delaware public benefit corporation (PBC), a hybrid structure that balances profit motives with social good.

Initially conceived as a nonprofit dedicated to democratizing AGI’s potential, OpenAI’s Articles of Incorporation explicitly declared its intention to prioritize societal benefit over private gain. AGI—a term denoting AI capable of outperforming humans across nearly all cognitive tasks—is framed in the letter as a technology “with civilization-scale implications,” necessitating ironclad governance tied to public interest, not shareholder returns.

Original vision of OpenAI: Nonprofit control as a bulwark

When OpenAI unveiled its capped-profit model in 2019, co-founder Sam Altman characterized the move as a pragmatic step to secure funding “while staying mission-first.” Key pillars of its original architecture included:

• Nonprofit oversight: The parent entity retained decision-making authority over the for-profit subsidiary’s AGI development.
• Fiscal boundaries: Investors’ profit potential was capped, ensuring excess revenues flowed to the nonprofit arm.
• Board composition: A majority of directors maintained arms-length relationships with the commercial entity.
• Legal accountability: The board’s fiduciary obligations were exclusively tied to advancing AGI safety and accessibility.
• Intellectual property governance: AGI breakthroughs remained under the nonprofit’s stewardship.

This design endured scrutiny even as Microsoft secured a major equity stake in 2023, with Altman reiterating before Senate lawmakers that “our legal structure protects the core mission from market forces.”

A threat to the mission?

Critics now argue the proposed PBC transformation undermines the nonprofit’s central role in three dimensions:

OpenAI’s leadership has defended the shift by citing talent acquisition challenges and capital constraints in its ongoing technology race against entities like Anthropic and Google DeepMind. However, the letter retorts this reasoning misdiagnoses the organization’s competitive advantage, which “has always stemmed from its moral clarity regarding AGI stewardship.”

“The stated rationale conflates structural flexibility with mission abandonment,” one signatory noted, drawing parallels to Elon Musk’s separate legal challenge against OpenAI. Musk contends the organization has betrayed its founding commitment—a charge the company denies, while accusing him of launching a “targeted effort to destabilize” its operations.

Call for intervention

The coalition urges regulators to investigate the restructuring’s compliance with California’s charitable trust laws, specifically querying why nonprofit oversight mechanisms characterized as essential in 2017 are now framed as outdated constraints. They advocate halting transition proceedings until independent audits confirm the new structure neither weakens safeguards against AGI misuse nor erodes board independence.

“We stand at the brink of granting exclusive control over humanity’s most pivotal technology to institutions optimized for value extraction rather than value stewardship,” the letter concludes. The signatories emphasize that while stakeholders deserve appropriate participation, “benefit cannot become optional in a public benefit corporation” when AGI’s deployment trajectory remains fundamentally uncertain.