A coalition of former OpenAI employees has urged the attorneys general of California and Delaware to block the company's transition from a nonprofit to a for-profit entity, citing serious concerns over AI safety and accountability.

As a Public Benefit Corporation (PBC), OpenAI would be required to pursue public benefits alongside profit, although Delaware law allows significant leeway in how it reports progress towards these goals.

Despite claims that the restructuring will strengthen its nonprofit arm and ensure public benefits from AI advancements, critics argue that it prioritizes financial pressures over its original ideals.

The coalition is calling for legal action to ensure transparency and adherence to nonprofit obligations, emphasizing that the future of AI oversight depends on maintaining public accountability over powerful technologies.

In light of these developments, the letter calls for regulatory scrutiny and oversight on AI advancements to mitigate risks and protect public interests.

Experts express concerns that a Delaware public benefit corporation has no obligation to prioritize public benefit over profits, raising doubts about OpenAI's commitment to its charitable purpose.

Notable signatories of the letter include Nobel-winning economists Oliver Hart and Joseph Stiglitz, as well as AI pioneer Geoffrey Hinton, all advocating for artificial general intelligence (AGI) that prioritizes humanity's benefits over investor interests.

The coalition argues that this restructuring undermines OpenAI's original charitable mission and removes essential governance safeguards designed to protect public interests.

OpenAI is under immense financial pressure, having reported a staggering $5 billion loss for 2024, and it anticipates further increases in expenses as it seeks to attract large investments.

However, the company faces legal challenges, including a lawsuit from co-founder Elon Musk, who claims the transition betrays the founding principles, while OpenAI countersued for unfair competition.

This push for restructuring is tied to OpenAI's recent $300 billion valuation and a $40 billion funding round led by SoftBank, with a critical deadline for conversion by the end of the year to secure full funding.

OpenAI contends that the restructuring is necessary to remain competitive against larger tech companies that are heavily investing in AI development.