To Convert to For-Profit Status, OpenAI Should Pay $30+ Billion, Share Technology
WASHINGTON, D.C. — As it considers converting from non-profit to for-profit status, OpenAI should be required to pay at least $30 billion and share any artificial general intelligence technologies it develops, Public Citizen said in a letter to California Attorney General Rob Bonta today.
Reuters reports that OpenAI has made the decision to convert to for-profit status, with some suggesting an announcement of such plans could be imminent.
In its letter, Public Citizen explains that under California law, in the case of a non-profit conversion, “the assets of the non-profit charitable enterprise must be disgorged and devoted to charitable purpose.”
Public Citizen argues that the OpenAI Nonprofit’s assets should be valued at north of $30 billion.
Although the nonprofit’s ownership stake in its for-profit affiliate is unknown, by the terms of its corporate arrangement, OpenAI Nonprofit has a controlling interest over the for-profit. According to OpenAI: “the for-profit subsidiary is fully controlled by the OpenAI Nonprofit. We enacted this by having the Nonprofit wholly own and control a manager entity (OpenAI GP LLC) that has the power to control and govern the for-profit subsidiary.”
“In normal market transactions, the control premium is valued at between 20 and 30 percent of the value of the overall enterprise, or sometimes higher,” Public Citizen argues in its letter. “At the lower end, that would suggest that OpenAI Nonprofit’s controlling interest in the for-profit is worth at least $30 billion.”
Public Citizen also argues that the for-profit OpenAI should — at minimum — be required to share artificial general intelligence (AGI) technologies it develops. “For-profit, monopolistic control over AGI is unacceptable and not in keeping with the charitable purpose underlying the creation of OpenAI Nonprofit,” the letter contends.
“California law is clear that when a nonprofit converts to for-profit status, it must pay into the charitable sector the value of the nonprofit,” said Public Citizen Co-President Robert Weissman. “Looking at OpenAI Nonprofit’s controlling interest in a company now valued at $150 billion, the conversion should require a minimum payment of $30 billion, or potentially much higher. That money should go to nonprofit foundations devoted to advancing AI safety and access.
“But money is not enough,” Weissman added. “A for-profit OpenAI should not be able to gain monopolistic control over technology that OpenAI itself says could transform the course of humanity. At minimum, that must be shared widely.”