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Nonprofit group joins Elon Musks effort to block OpenAIs for-profit transition
Encode, the nonprofit org that co-sponsored Californias ill-fated SB 1047 AI safety legislation, has requested permission to file an amicus brief in support of Elon Musks injunction to halt OpenAIs transition to a for-profit.In a proposed brief submitted to the U.S. District Court for the Northern District of California Friday afternoon, counsel for Encode said that OpenAIs conversion to a for-profit would undermine the firms mission to develop and deploy transformative technology in a way that is safe and beneficial to the public.OpenAI and its CEO, Sam Altman, claim to be developing society-transforming technology, and those claims should be taken seriously, the brief read. If the world truly is at the cusp of a new age of artificial general intelligence (AGI), then the public has a profound interest in having that technology controlled by a public charity legally bound to prioritize safety and the public benefit rather than an organization focused on generating financial returns for a few privileged investors.OpenAI was founded in 2015 as a nonprofit research lab. But as its experiments became increasingly capital-intensive, itcreatedits current structure, taking on outside investments from VCs and companiesincludingMicrosoft.Today, OpenAI has a for-profit org controlled by a nonprofit with a capped profit share for investors and employees. But in ablog post this morning, the company said it plans to begin transitioning its existing for-profit into a Delaware Public Benefit Corporation (PBC), with ordinary shares of stock and the OpenAI mission as its public benefit interest.OpenAIs nonprofit will remain, but cede control in exchange for shares in the PBC.Muskfiledfor a preliminary injunction to halt the companys transition to a for-profit, which has long been in the works, late in November. He accused OpenAI of abandoning its original philanthropic mission to make the fruits of its AI research available to all, and of depriving rivals including his AI startup, xAI, of capital through anticompetitive means.OpenAI hascalledMusks complaints baseless and simply a case of sour grapes.Facebooks parent company and AI rival, Meta, is also supporting efforts to block OpenAIs conversion. In December, Metasenta letter to California attorney general Rob Bonta, arguing that allowing the shift would have seismic implications for Silicon Valley.Lawyers for Encode said that OpenAIs plans to transfer control of its operations to a PBC would convert an organization bound by law to ensure the safety of advanced AI into one bound by law to balance its consideration of any public benefit against the pecuniary interests of [its] stockholders.Encodes counsel notes in the brief, for example, that OpenAIs nonprofit has committed to stop competing with any value-aligned, safety-conscious project that comes close to building AGI before it does, but that OpenAI as a for-profit would have less incentive to do so. The brief also points out that the nonprofit OpenAIs board will no longer be able to cancel investors equity if needed for safety once the companys restructuring is completed. OpenAIs touted fiduciary duty to humanity would evaporate, as Delaware law is clear that the directors of a PBC owe no duty to the public at all, Encodes brief continued. The public interest would be harmed by a safety-focused, mission-constrained nonprofit relinquishing control over something so transformative at any price to a for-profit enterprise with no enforceable commitment to safety.Encode, founded in July 2020 by high school student Sneha Revanur, describes itself as a network of volunteers focused on ensuring voices of younger generations are heard in conversations about AIs impacts. Encode has contributed to various pieces of AI state and federal legislation in addition to SB 1047, including the White Houses AI Bill of Rights and President Joe Bidens Executive Order on AI.
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