Guest Commentary written by

Orson Aguilar

Orson Aguilar

Orson Aguilar is the founding president and CEO of LatinoProsperity. A Boyles Height, Los Angeles, native, he is a board member of The East Los Angeles Community Corporation and Innovate Public Schools.

Catherine Bracy

Catherine Bracy

Catherine Bracy is the founder and CEO of TechEquity. She is the author of “World Eaters,” and previously served as Code for America’s senior director of partnerships and ecosystem.

Just days after abandoning its planned conversion to a for-profit entity and proclaiming it would remain a nonprofit, OpenAI puzzled us with another announcement: a nearly $6.5 billion deal to buy io, a start-up created by former Apple executive and iPhone designer Jony Ive.

This isn’t the only business deal OpenAI has in the works. The company also announced plans to build a massive new data center in the United Arab Emirates and has reportedly purchased AI startup Windsurf.

If anyone was under the impression that OpenAI’s decision to remain a nonprofit is a win for the public, its profit-driven business moves should put that to rest. Deals like these, which require OpenAI to sell stakes in the company, erode the nonprofit’s control of the business. 

Meanwhile, OpenAI has still not answered fundamental questions about how their conversion to a public benefit corporation will maintain the nonprofit’s independent oversight. Which of OpenAI’s entities owns the technologies it develops? How will OpenAI avoid conflicts of interest and self-dealing among executives and investors? Who will reap the funds that the for-profit sows? Most of all, what happens when shareholder interests conflict with the public interest that the nonprofit is legally bound to serve?

Without answers to these critical questions, the investigations into OpenAI’s structure by the California and Delaware attorneys general must continue.  

OpenAI was originally founded as a nonprofit to ensure artificial intelligence would benefit all of humanity. Today, it is operating under a structure that allows profit and commercial gain to take priority over its mission to serve the public good.

Since 2019, OpenAI has methodically shifted power away from its nonprofit parent organization into a tangled web of business deals and investor relationships. Meanwhile, the nonprofit increasingly plays the role of a weak and passive bystander rather than a steward of the public interest — its assets are largely unaccounted for and its ability to steer AI toward meaningful public benefits is deeply compromised.

OpenAI’s latest pivot is a clever rebranding of its problematic business-as-usual approach. It’s a way to deflect lawsuits, avoid further scrutiny and put the interests of investors ahead of the everyday people OpenAI is legally required to serve.

The public deserves answers and transparency. While disputes over governance structures and the legalities of nonprofit ownership may seem tedious and disconnected from the lives of everyday people, OpenAI’s future has huge implications for the well-being of society.

On the one hand, artificial intelligence is leading to breakthroughs that are helping us adapt to climate change, detect deadly diseases and simply give us more time back in our busy lives. On the opposite end, the technology is also accelerating greenhouse gas emissions, while leading to wrongful incarceration, unemployment and worldwide misinformation.

In OpenAI’s own founding words: “It’s hard to fathom how much human-level AI could benefit society, and it’s equally hard to imagine how much it could damage society if built or used incorrectly.” If OpenAI’s charitable assets were separated from its commercial interests and put into the hands of a fully independent nonprofit that can carry out its original mission, there is a much better chance of ensuring the positive future vision for AI than the negative.

That’s why the attorneys general of California and Delaware need to take decisive action in their ongoing investigations into OpenAI’s restructuring. There must be robust investigation and oversight of OpenAI’s governance structure, including a review of past compliance with California charitable law. All nonprofit assets unrelated to governance should be fairly valued and required to transfer to a new, fully independent charitable entity dedicated to maximizing public benefit. Lastly, the nonprofit board needs true independence and ongoing oversight power to hold OpenAI accountable.

OpenAI started as a nonprofit, which means it must serve the public good, not private interests. Yet for years, OpenAI has been using those charitable assets for commercial purposes, violating its mission. There must be a clear separation. That’s what OpenAI promised when it started, and it’s what the public deserves.