OpenAI questions Musk’s links to a bill which could upset its for-profit restructuration.
Experts have called on regulators to stop the move.
There are broader concerns about how this could affect the development, ethics and security of generative AI.
Editor’s Note (6 May 2025)
OpenAI published on Monday, 5 May, a post announcing the cancellation of their plans to restructure into a for-profit company. Many viewed the move as a victory for the public, following public and regulatory pressure by the Attorneys General in Delaware and California. OpenAI’s LLC will become a Public Benefit Corporation, taking into consideration the company’s mission and shareholder interests. Sam Altman, the company’s CEO, explained the decision in a letter sent to employees and investors. He expressed the excitement of the company for its new direction.
OpenAI has contacted a group that is behind a bill which could threaten its for-profit reorganization plans and asked if it has any ties with former co-founder Elon Musk.
The nonprofits, researchers and consumer advocates who founded the group campaign for nonprofit integrity in AI.
According to the coalition, Musk did not finance it. According to a spokesperson it’s a grassroots’ organisation funded by various sources, including the relatives of Suchir Baliaji, the late OpenAI whistleblower and engineer who died last year.
What’s the future of all this? Let’s dig in!
Sam Altman’s Letter Goes On the Attack
OpenAI’s letter makes two requests:
An appointment with the coalition’s president, Jeffrey Mark Gardner;
Disclosure of the coalition’s sources of financing, which are not published in tax documents because of its recent incorporation;
The group’s decision in February to support an original bill that could have stopped OpenAI’s for-profit restructuring plan The author has amended the letter, citing a need for more work time.
No other indications of a Musk connection has appeared to date. The group is gaining support from industry figures including the godfathers of AI, Geoffrey Hinton.
The letter is the latest in a long-running court battle between Elon Musk, CEO of OpenAI, and Sam Altman. Musk, who co-founded OpenAI along with Altman, before leaving to start rival xAI and launching his own company, is contesting the plans of the company to switch to a profit-driven model.
What is his argument? OpenAI would then be straying from its original mission in order to benefit the public.
Musk’s views aren’t the only ones.
In a lettersigned by former OpenAI employees and Nobel Prize winners to the Attorneys-General for California and Delaware, the regulators were urged to prevent OpenAI reorganizing into a for profit entity.
The Attorney General of California launched an investigation as a result. Why are so many experts against OpenAI’s for-profit restructuring?
Changing from a nonprofit to a for profit structure can often mean a reduction in the priority of safety, research and development. The letter that was revealed to the public in April claims that this move would ‘eliminate the essential safeguards’ which protect against AGI.
AGI in more detail
Artificial General Intelligence (AGI)— systems that are capable of outperforming humans in understanding, acquiring knowledge, and applying it across different tasks — could become the most powerful technology when it arrives. Experts say that it’s a technology that will change the world, but also comes with risks. These risks could be more severe if a for-profit corporation controls it.
For-profit companies are focused on generating profits for their shareholders. Profit could be given priority over safety, ethics, or the benefits to society. AGI development could be compromised by the added pressure to get it to market quickly, especially in terms of safety.
OpenAI may also decide one day to develop military-grade AGI solely for profit, abandoning its original society-first goals.
Experts argue that any AGI will likely be proprietary to its creator. This will make it difficult for regulators, researchers, and the public to create safeguards and closely scrutinize its development.
Because of the more competitive compensation offered by for-profit companies, top talent will be attracted to them, making it harder for nonprofits to compete.
A network of neon lights above a highway, showing AGI at the heart
We could also posit that industry norms could shift if the move to a for-profit structure were validated. Other AI startups could start doing the same. This could mean that for-profit firms come under less ethical scrutiny if it’s seen as commonplace for companies in the sector.
It could also result in fewer investors for nonprofit entities as more resources go toward for-profit entities. This would make it harder for nonprofits to compete in an expensive and competitive industry.
On the other hand, some say that safety and ethical concerns won’t suddenly disappear in a for-profit organization, with public pressure and the long-term risks of AI pushing to highlight these.
AI research organizations and advocacy groups would continue to push for the responsible development of AI across the market, regardless of whether companies are nonprofit or for-profit.
While that’s certainly true, will profit be too much of a temptation?
OpenAI Should Be Held Accountable to Its Initial Purpose: Benefiting Humanity
There’s the inherent risk that OpenAI — or any AI startup moving to a for-profit structure — could become a monopoly, with vast control over society and the economy.
Which makes the irony palpable, considering OpenAI was founded to combat this very monopoly.
In December 2015, the AI startup was launched when Google seemed on the brink of creating AGI. CEO Sam Altman believed that if a commercial company developed AGI, it would harm the public.
The company’s founding announcement in its Articles of Incorporation stated:
Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained in a need to generate financial return. Since our research is free from financial obligations, we can better focus on a more positive human impact.
According to President Greg Brockman, OpenAI’s original purpose wasn’t even to develop AGI:
It’s not the true mission of OpenAI to build AGI. The true mission of AGI is that it works well for humanity… Our goal is not to build it, but to ensure it works well for the entire world.
Should regulators intervene to stop OpenAI’s proposed restructure? Many experts are unanimous in their agreement.
Speaking with Stuart Russell, UC Berkeley professor of computer science, says in Time that OpenAI, as a nonprofit organization, can be shut down if they deviate from their mission. He explains that this is like an off-switch. To move to a profit-oriented entity, it is akin to turning off the off-switch.
Futuristic cityscape with US and Chinese flags, representing AGI competition
Then there’s OpenAI’s argument that everyone would benefit if it builds AGI before a Chinese company. While this is true at its core, there are other organizations at the forefront of AI.
If it retains its nonprofit status, there’s no reason why it couldn’t offer its resources, compute, and talent to the US government or other US-based organizations to ensure America remains ahead of Chinese competition.
The letter proposes that regulators protect the charitable purpose of OpenAI at a ‘potentially pivotal moment’ in the development of AGI, safeguarding the public. It also demands answers to fundamental questions, such as how a for–profit restructuring benefits humanity and the greater good.
The plan of action outline suggests that, if and when OpenAI creates AGI, it ‘should belong to the nonprofit entity. Their sole responsibility is to ensure it is used responsibly for the benefit of humanity. It should not be owned or controlled by a commercial entity or its investors.’
It’s easy to see why tensions are running high in the court case between Musk and OpenAI. And even higher between the ChatGPT creator and those staunchly opposing the company’s planned restructuring.
With OpenAI now querying Musk’s ties to the coalition challenging its for-profit plans, we’ll need to wait and see how this debate will unfold.
Paula has been a writer for over a decade, starting off in the travel industry for brands like Skyscanner and Thomas Cook. She’s written everything from a guide to visiting Lithuania’s top restaurants to how to survive a zombie apocalypse and also worked as an editor/proofreader for indie authors and publishing houses, focusing on mystery, gothic, and crime fiction. Read more
She made the move to tech writing in 2019 and has worked as a writer and editor for websites such as Android Authority, Android Central, XDA, Megagames, Online Tech Tips, and Xbox Advisor. These days as well as contributing articles on all-things-tech for Techreport, you’ll find her writing about mobile tech over at Digital Trends.
She’s obsessed with gaming, PC hardware, AI, and the latest and greatest gadgets and is never far from a screen of some sort.Her attention to detail, ability to get lost in a rabbit hole of research, and obsessive need to know every fact ensures that the news stories she covers and features she writes are (hopefully) as interesting and engaging to read as they are to write.
When she’s not working, you’ll usually find her gaming on her Xbox Ser ies X or PS5. As well as story-driven games like The Last of Us, Firewatch, and South of Midnight she loves anything with a post-apocalyptic setting. She’s also not averse to being absolutely terrified watching the latest horror films, when she feels brave enough! Read less
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