Encode, a youth-led nonprofit organization advocating for responsible AI development, has filed an amicus brief urging the U.S. District Court for the Northern District of California to block OpenAI’s planned transition to a for-profit entity.
The brief, filed in support of Elon Musk’s lawsuit, warns that the restructuring could jeopardize public safety and undermine OpenAI’s commitment to developing AI systems that prioritize the well-being of humanity.
OpenAI was founded in 2015 with the original mission to ensure artificial intelligence would benefit all of humanity. However, the high operating costs forced the company to change to a hybrid model in 2019. That switch allowed outside funding but retained some nonprofit control.
Now, the AI company intends to convert its for-profit part into a Delaware Public Benefit Corporation (PBC), which would balance shareholder profits with public interest. The change has brought up major worries from groups like Encode, who argue that it could place profit above safety.
The brief described OpenAI’s change as one that would seriously undermine the critical safety measures put in place to protect the public. The nonprofit structure allowed OpenAI to work in the public interest while focusing on safety; however, with its change to for-profit, that focus may now be shifted toward making money.
This, the brief says, will mean less responsibility and raise very serious questions about the ethical risks of AI.
Experts in the AI field have also voiced their concerns about OpenAI changing its structure. Geoffrey Hinton, who won a Nobel Prize in Physics, said that “allowing this shift sends a troubling message about prioritizing profit over safety.”
Stuart Russell, a professor at UC Berkeley, agreed with Hinton, saying that OpenAI’s nonprofit governance was important to stop serious risks from AI development. “The idea that human existence should be decided only by investors’ profit-and-loss calculations is abhorrent,” he said.
Elon Musk, a co-founder and early funder of OpenAI, has also been vocal in opposing the restructuring. Musk filed his own lawsuit in November last year, accusing OpenAI of abandoning its original philanthropic mission.
He said that OpenAI changing to a for-profit company would lower the resources available for other AI startups and cause a monopoly in AI development. Musk criticized this change on social media, saying OpenAI’s shift was “a closed-source, profit-maximizing move” that went against its original open-source, nonprofit goals. “OpenAI was founded as an open-source, nonprofit, but has become a closed source, profit-maximizer,” he tweeted.
Encode also warns that OpenAI’s transition comes at a critical moment in AI governance. With the rapid development of artificial general intelligence (AGI), the brief highlights the risks of allowing a for-profit model to control such powerful technologies.
AGI will likely alter society in significant ways, and Encode maintains that the public’s interests should be its prime focus as it develops. A hearing for the preliminary injunction order is scheduled before U.S. District Judge Yvonne Gonzalez Rogers on January 14, 2025.
Also Read: Open AI whistleblower death causes ripples, Elon Musk responds
