OpenAI plans on transitioning into a fully for-profit company this year amid growing opposition from a diverse coalition of organisations and individuals, including Geoffrey Hinton, considered ‘Godfather of AI’.
Hinton, who won the Nobel Prize in Physics last year, criticised the ChatGPT-maker for moving away from its non-profit roots. “OpenAI was founded as an explicitly safety-focused non-profit and made a variety of safety-related promises in its charter. It received numerous tax and other benefits from its non-profit status,” Hinton said.
“Allowing it [OpenAI] to tear all of that up when it becomes inconvenient sends a very bad message to other actors in the ecosystem,” he said.
Hinton worked at Google but quit in May 2023 to be able to speak freely about the dangers of AI. His remarks on OpenAI were issued in a statement accompanying an amicus brief by Encode – a youth-led non-profit organisation – in support of Elon Musk’s lawsuit that is seeking an injunction to halt OpenAI’s for-profit pivot.
OpenAI’s planned shift from a nonprofit to a Delaware public benefit corporation (PBC) would “undermine specific safety-focused commitments the nonprofit has made to the public,” Encode said in its legal filing. It also raised questions about OpenAI’s vow to “stop competing with and start assisting” any value-aligned organisation that appears close to building artificial general intelligence (AGI) before it does.
“Today, a handful of companies are racing to develop and deploy transformative AI, internalising the profits but externalizing the consequences to all of humanity […] The courts must intervene to ensure AI development serves the public interest,” Sneha Revanur, the president and founder of Encode, said in a statement.
Currently, the non-profit arm known as OpenAI Inc controls a holding company called OpenAI GP. These two entities further control the capped-profit subsidiary called OpenAI Global LLC that was set up in 2019 to licence out the AI tools it developed.
The Microsoft-backed AI startup has said that its corporate structure must evolve again to advance its mission of developing AGI safely and in a way that benefits all of humanity.
In a blog post published on December 27, 2024, OpenAI said that its existing for-profit arm will transition into a PBC based in Delaware, US. The PBC will run OpenAI’s operations and businesses, while the non-profit arm will hire a leadership team and staff “to pursue charitable initiatives in sectors such as health care, education, and science.”
However, OpenAI’s for-profit pivot faces legal hurdles. In November last year, Elon Musk sued the AI entity and urged the court to stop its for-profit transition on the grounds that OpenAI is allegedly abandoning its original philanthropic mission.
In response, OpenAI argued that Musk’s lawsuit should be dismissed as it lacks any standing and could give Musk’s own AI startup, xAI, an unfair competitive advantage
Meanwhile, Meta has also opposed OpenAI’s conversion into a for-profit in a recent letter addressed to California Attorney General Rob Bonta.
Content retrieved from: https://indianexpress.com/article/technology/artificial-intelligence/openai-for-profit-shift-godfather-of-ai-9755930/.
