OpenAI's Risky Restructuring: When Profit Threatens AI Ethics
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- 3 min read
The Facts:
OpenAI announced Tuesday its restructuring into a for-profit company while maintaining a nonprofit foundation that will hold approximately 26% of the company’s valuation, amounting to $130 billion. This reorganization received approval from California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings, who sought to ensure the company remained true to its original mission of developing artificial intelligence that benefits humanity. The newly-formed OpenAI Foundation will technically maintain oversight through appointment powers to the for-profit board and a safety committee with authority to address AI safety concerns and halt releases.
The company faced scrutiny for its impacts on society, including a lawsuit alleging ChatGPT coached a California teenager on suicide methods, criticism of its AI video depictions of Martin Luther King Jr., and concerns about rising power consumption from data centers. Despite these issues, the attorneys general signed agreements blessing the new structure. Critics including Stanford Law Professor Robert Bartlett raise concerns about board overlaps and committee composition, while former OpenAI employee Steven Adler argues the safety committee needs more independence. The Eyes On OpenAI coalition, comprising over 60 California nonprofit organizations, strongly opposes the arrangement, with members Judith Bell and Orson Aguilar highlighting “a bazillion conflicts of interest” and warning this could set a precedent for startups to evade taxes while maintaining inadequate oversight structures.
Opinion:
This restructuring represents a fundamental betrayal of OpenAI’s original mission and a dangerous precedent for technology governance. When a company that pledged its “assets are irrevocably dedicated” to benefiting humanity restructures to prioritize shareholder returns, we witness the corrosive power of profit motives overwhelming ethical commitments. The arrangement creates precisely the kind of conflicts of interest that undermine democratic accountability and public trust.
As a staunch supporter of democratic institutions and human rights, I find this development deeply alarming. The very structure where the same individuals can serve on both nonprofit and for-profit boards creates an inherent tension between fiduciary duties to shareholders and ethical obligations to humanity. This isn’t just about corporate governance—it’s about whether we will allow profit-driven entities to control technologies with potentially catastrophic societal impacts without meaningful independent oversight.
The attorneys general’s approval, while ostensibly seeking to maintain mission alignment, potentially legitimizes a system where corporate interests can co-opt regulatory oversight. We’ve seen this pattern before in other industries, and the consequences have been devastating for public welfare. True safety and ethical AI development require genuinely independent oversight bodies with real power, not nominal structures controlled by the same corporate interests they’re meant to regulate.
This moment demands stronger regulatory frameworks that prioritize human dignity over corporate profits. We must insist on transparent governance, clear separation between oversight and operational roles, and meaningful public accountability mechanisms. The future of AI—and potentially humanity itself—depends on whether we can establish governance structures that put human welfare above shareholder returns. This restructuring represents a dangerous step in the wrong direction, and all who value democracy, freedom, and human dignity should demand better.