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California’s Attorney General Must Investigate OpenAI’s Non-Profit Status and Valuation

WASHINGTON, D.C. – California’s Attorney General should investigate OpenAI’s charitable status and the non-profit’s valuation, Public Citizen said in a letter today. 

OpenAI appears to no longer be serving its public, non-profit purpose, and instead is effectively controlled by its for-profit OpenAI affiliate, Public Citizen maintains in its third letter to the office. New evidence addressed in the letter illustrates the fundamental change at the organization:

  • OpenAI’s safety leaders departed, and the company replaced its safety team with a group headed by CEO Sam Altman;
  • OpenAI’s nonprofit board did not know about the release of ChatGPT 3.0 and other key details prior to the shakeup last November;
  • OpenAI is preparing to release its human-sounding Voice Mode feature, brazenly contradicting the non-profit’s ostensible safety-first mission; and
  • Open AI is engaging in business partnerships with companies in which Altman controls substantial shares, raising questions about conflicts and improper inurement.

“If OpenAI, Inc. is no longer serving its public, nonprofit purpose, then under California law it should be dissolved, with the value of its assets transferred to another charitable enterprise, such as one or more foundations devoted to artificial intelligence ethics and safety,” the letter reads.

Determining the value of OpenAI’s assets will require a careful evaluation. OpenAI’s sale of employee stock valued the company at $86 billion. Public Citizen has argued that the OpenAI asset valuation should take into account the nonprofit’s controlling interest in its for-profit affiliate.

“OpenAI was founded with the promise that it would be a different kind of tech firm, one that elevated and prioritized safety and the public interest over commercial considerations,” said Robert Weissman, president of Public Citizen. “Unfortunately, the company appears to have abandoned that orientation – and is now more aggressive than its for-public competitors. The law should catch up with the on-the-ground reality and no longer treat OpenAI as a nonprofit.”

Previous letters calling for an investigation were sent on January 9 and March 5.