OpenAI, the tech company that created the popular ChatGPT chatbot, is at a crossroads.
It began as a nonprofit dedicated to developing artificial intelligence systems smarter than humans. Since its founding, OpenAI has boasted that it was upholding its nonprofit goal – “to build artificial general intelligence (AGI) that is safe and benefits all of humanity.”
Now, its tune has changed. OpenAI’s leadership is reportedly taking steps to transform it into a for-profit company. If that happens, the nonprofit would lose control.
We are law professors who specialize in nonprofits. As we explained in an earlier article, all charities must devote their assets to their legal purposes. If OpenAI hoped to have a quickie divorce from its charitable obligations, it is now learning how costly that could be.
OpenAI began in 2015 as a scientific research nonprofit. Four years later, its board decided that achieving its lofty goals required more than gifts and grants.
It reorganized to accommodate and attract private investment. As a result, the company known as OpenAI is neither a single nonprofit nor for-profit company; it is a set of interlocking entities, including the for-profit subsidiary that conducts its operations.
As a whole, OpenAI is ultimately required to advance the nonprofit’s purposes. These purposes represent the promises OpenAI made to the public when it was founded.
OpenAI’s nonprofit certificate of incorporation states the purposes: “to provide funding for research, development and distribution of technology related to artificial intelligence,” thus producing technology that “will benefit the public.”
For almost a decade, OpenAI proclaimed its commitment to safe scientific development, making it a higher priority than earning profits. For example, OpenAI warned investors that “the Company may never make a profit,” and that “it would be wise to........