"But details of the move could revive worries that San Francisco-based OpenAI is misusing charitable tax exemptions, experts and advocates told CalMatters. The ChatGPT maker is putting its nonprofit arm nominally in control of the for-profit entity, but there are numerous ways the for-profit company could end up calling the shots, these people said. There are also important, unanswered questions about the safeguards that are supposed to keep that from happening."
"Under the restructuring, the newly-formed OpenAI Foundation will hold about 26 percent of OpenAI's valuation, a share amounting to $130 billion, instantly making it one of the most well-endowed philanthropic organizations in the world. Microsoft, company employees, and other investors will hold the rest. The controlling nonprofit foundation can appoint members of the for-profit board of directors and, through a special committee, step in to address AI safety concerns. The company also pledged to remain in California."
"OpenAI's plans came under scrutiny in California because Bonta, along with Delaware Attorney General Kathy Jennings, wanted to ensure the company stayed true to the mission laid out in its charter when the organization was founded as a nonprofit a decade ago to make artificial intelligence that benefits humanity. The company had pledged all "assets are irrevocably dedicated" to this purpose."
OpenAI will restructure into a for-profit company while creating the OpenAI Foundation to hold about 26 percent of the company’s valuation, roughly $130 billion. Microsoft, employees and other investors will own the remainder. The foundation can appoint members to the for-profit board and can intervene through a special committee on AI safety issues. The company pledged to remain in California. Experts, advocates and state attorneys general raised concerns about whether the nonprofit control is nominal, whether safeguards are sufficient to prevent the for-profit from calling the shots, and whether charitable tax exemptions could be misused.
Read at San Jose Inside
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