Encode, a nonprofit organization, has requested to file an amicus brief in support of Elon Musk's injunction against OpenAI's move to a for-profit structure. The organization argues this shift undermines OpenAI's original mission of prioritizing safety and public benefit in AI development.
Encode's proposed brief, submitted to the U.S. District Court for the Northern District of California, claims that OpenAI's conversion would prioritize financial returns for investors over public safety, especially as artificial general intelligence (AGI) development progresses. Encode founder Sneha Revanur stated that the courts must ensure AI development serves the public good.
The brief is supported by AI pioneers Geoffrey Hinton, a Nobel Laureate, and Stuart Russell, a professor at UC Berkeley. Hinton emphasized that OpenAI received benefits as a nonprofit and should not abandon its safety focus. The nonprofit’s initial commitments, they argue, are crucial for maintaining public trust in this rapidly evolving field.
Originally launched as a nonprofit in 2015, OpenAI adopted a hybrid structure later to attract outside investments. Now, OpenAI intends to fully transition into a for-profit Delaware Public Benefit Corporation, relinquishing control by its nonprofit counterpart. This change has drawn legal challenges from Musk, a former contributor, and criticism from Meta, who both raise antitrust concerns.
Musk contends that OpenAI has abandoned its original mission, while Meta warned that such a transition could have major implications in Silicon Valley. Encode’s brief contends that transitioning to a PBC would legally bind OpenAI to balance any public benefit against the financial interests of shareholders, thereby diluting its commitment to AI safety.
Encode highlights that as a nonprofit, OpenAI committed to not competing with safety-conscious projects close to achieving AGI, a principle that may be ignored as a for-profit. Additionally, it points out that the non-profit will no longer have power to cancel investors’ equity if needed for safety. The organization, which has been involved in several AI legislation efforts, warns that this transition could diminish public safety safeguards in AI development.
OpenAI's restructuring comes as the company experiences a talent outflow, with some citing concerns about the prioritization of commercial products over safety. Former policy researcher, Miles Brundage, said that the non-profit will be reduced and the new company will act like a “normal company”. Encode argues that OpenAI's claimed "fiduciary duty to humanity" would become meaningless under Delaware law, as PBC directors have no obligation to the public interest. The case raises critical questions about the balance between profit and public safety in AI development, and the future governance of these powerful technologies.
