OpenAI’s Nonprofit Should Not Be Allowed to Receive $100B Stake in the For-Profit
WASHINGTON, D.C. — In a new letter sent to California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings, Public Citizen rebukes OpenAI’s announcement that OpenAI Nonprofit will be given a $100 billion stake in the for-profit company and calls upon the attorneys general to reject this proposal.
Since at least November 2023, it has been clear that OpenAI is functioning as a for-profit corporation, with OpenAI Nonprofit — which formally holds a controlling interest in the for-profit — operating as little more than a rubber stamp of the for-profit. In light of this, Public Citizen has repeatedly urged for OpenAI Nonprofit to be dissolved, and its significant assets be allocated to new charitable entities.
“The newly proposed arrangement is one that would both fail to honor OpenAI’s Nonprofit obligations and would insulate OpenAI For-Profit from the basic shareholder accountability attached to publicly traded firms,” said Robert Weissman, co-president of Public Citizen. “OpenAI’s nonprofit clearly long ago abandoned its nonprofit purpose and mission, and should be dissolved.
“Under OpenAI’s proposal, OpenAI Nonprofit would effectively function as a corporate foundation designed to advance the interests of the for-profit, rather than as an independent nonprofit exercising control over the for-profit.
“The proposal would also create problems on the for-profit side, effectively establishing for OpenAI a dual-class share structure that would immunize OpenAI’s for-profit management from any meaningful accountability.
“If the California and Delaware attorneys general decide not to dissolve OpenAI Nonprofit,” Weissman concluded, “they should absolutely require that the major payment forthcoming from OpenAI for-profit be made to one or more new, independent charitable entities.”
Public Citizen’s previous letters on this subject are available to view on our website (January 2024; March 2024; June 2024; September 2024; December 2024). For more information or to speak with an expert, contact eleach@citizen.org.