OpenAI’s decision to transition into a fully for-profit company this year has sparked criticism from notable figures, including Geoffrey Hinton, often referred to as the “Godfather of AI.” Hinton, who was awarded the Nobel Prize in Physics last year, has expressed concerns about the move, arguing it contradicts OpenAI’s founding principles.
“OpenAI was established as a safety-focused non-profit, making several safety-related commitments in its charter while benefiting from tax and other advantages tied to its non-profit status,” Hinton said in a statement. “Allowing the organization to discard these commitments undermines trust in the broader AI ecosystem.”
Hinton, who resigned from Google in May 2023 to freely discuss AI’s risks, released his statement alongside an amicus brief from Encode, a youth-led non-profit supporting Elon Musk’s lawsuit against OpenAI’s shift.
The lawsuit seeks an injunction to prevent OpenAI from becoming a Delaware public benefit corporation (PBC). Encode argues that this shift could compromise OpenAI’s commitments to safety and collaboration. It also highlights concerns about OpenAI’s promise to assist rather than compete with organizations nearing breakthroughs in artificial general intelligence (AGI).
“Today, a few companies are racing to develop transformative AI, prioritizing profits while offloading the risks onto humanity,” said Sneha Revanur, Encode’s founder. “Judicial intervention is necessary to ensure AI development aligns with public interests.”
OpenAI defended its move, stating in a December 27, 2024, blog post that evolving its corporate structure is essential for advancing its mission of creating AGI that benefits humanity. Under the proposed structure, OpenAI’s for-profit arm will become a Delaware PBC, while its non-profit division will focus on charitable efforts in fields like healthcare, education, and science.
The transition faces legal obstacles, with Musk’s lawsuit alleging OpenAI’s for-profit pivot abandons its philanthropic mission. OpenAI, backed by Microsoft, has called for the dismissal of the suit, arguing that it lacks merit and could unfairly benefit Musk’s AI company, xAI.
The outcome of the legal battle will be closely watched as it could set a precedent for how AI organizations balance profit-making with ethical responsibilities.
