Critics Say OpenAI’s Revised Restructuring Still Prioritizes Profit Over Public Good

A group of former OpenAI employees and AI experts — including renowned computer scientist Geoffrey Hinton — has submitted a new letter to California and Delaware attorneys general, warning that OpenAI’s latest organizational restructuring still fails to uphold its founding mission of developing artificial intelligence for the benefit of humanity.

The group, calling itself Not For Private Gain, first criticized OpenAI earlier this year when the company proposed a plan to reduce control by its nonprofit parent entity. Facing backlash, OpenAI scaled back the changes and announced a revised plan in May: to convert its for-profit unit into a Public Benefit Corporation (PBC), with the nonprofit retaining major shareholder status.

Despite this shift, the group argues in its May 12 letter that the revised structure still allows for investor interests to outweigh ethical safeguards:

• Under the current setup, OpenAI’s nonprofit has full operational control over the for-profit entity, including executive hiring and firing. The group says this control would be weakened under the new PBC, undermining accountability.

• They also note that while the current for-profit entity is legally bound to prioritize OpenAI’s mission and charter over profits, a PBC has no such explicit legal obligation.

OpenAI responded, stating: “The nonprofit would continue to have control over the PBC, full stop. Any suggestion otherwise is not accurate.”

Broader Concerns and Musk’s Involvement:

The restructuring debate has sparked wider criticism, including from Elon Musk, OpenAI’s co-founder and now rival via his company xAI. Musk is currently suing OpenAI for allegedly breaching its founding agreement by prioritizing commercial goals over public benefit. A lawyer representing Musk backed the letter, dismissing OpenAI’s revised structure as “nothing but window dressing.”

OpenAI’s main corporate backer, Microsoft, has invested more than $13 billion, and the restructuring is viewed as a means to attract additional capital needed to remain competitive in the rapidly evolving and costly AI sector.

While a Public Benefit Corporation is designed to balance profits and public interest, critics remain skeptical that the new model will provide the necessary governance and enforcement mechanisms to prevent the misuse of powerful AI technologies.