Nonprofit Joins Elon Musk’s Campaign Against OpenAI’s Shift to For-Profit Model
Encode, a nonprofit group that previously co-sponsored California’s SB 1047 AI safety legislation, is seeking to join Elon Musk’s lawsuit aimed at blocking OpenAI’s shift to a for-profit model. This move follows Musk’s request for an injunction to halt OpenAI’s transition, which he argues contradicts the original philanthropic intentions of the organization.
The proposed amicus brief filed to the U.S. District Court for the Northern District of California asserts that OpenAI’s transition would undermine its mission to create technology that is safe and beneficial for the public. The brief emphasizes the potential societal implications of allowing a profit-focused entity to control transformative AI technology, advocating instead for its governance by a nonprofit committed to public interest.
OpenAI was established in 2015 as a nonprofit but adapted its structure as its financial needs grew. Its current hybrid model includes a capped-profit element, attracting significant investments from venture capitalists and corporate partners, including Microsoft. OpenAI plans to evolve its for-profit division into a Delaware Public Benefit Corporation (PBC), which would introduce normal stock shares while retaining a mission-oriented nonprofit at its helm. This restructuring has raised concerns about the balance between profit motives and public safety, with critics highlighting that the PBC would not be legally bound to prioritize public benefit as the nonprofit was.
Musk, an early supporter of OpenAI, filed for the injunction in November, claiming the organization has strayed from its mission of providing AI benefits to humanity. He contends that the transition could inhibit competition and lead to negative market outcomes. OpenAI has dismissed Musk’s allegations as unfounded and motivated by self-interests tied to his own AI venture, xAI.
In addition to Musk, Meta, another major player in the AI space, has also expressed opposition to OpenAI’s transition plans. The company has actively engaged with state authorities, arguing that the shift could have substantial consequences for the tech industry.
Encode’s brief warns that OpenAI’s operational control shifting to a PBC would “convert an organization bound by law to ensure the safety of advanced AI into one bound by law to balance its public benefits against the profitability of its shareholders.” They point out that the current commitments to avoid competition with safety-focused projects could diminish under a for-profit model.
Founded by high school student Sneha Revanur in 2020, Encode strives to amplify the voices of younger generations in discussions about AI’s impact. The organization has been involved in various legislative efforts regarding AI, including contributions to the White House’s AI Bill of Rights and President Biden’s executive order on AI safety.
For more related information, you can explore the links below:
- OpenAI Transition to For-Profit
- Elon Musk’s Injunction
- California’s SB 1047 AI Safety Legislation
- White House’s AI Bill of Rights
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