Encode, the nonprofit org that co-sponsored California’s ill-fated SB 1047 AI safety legislation, has requested permission to file an amicus brief in support of Elon Musk’s injunction to halt OpenAI’s 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 OpenAI’s conversion to a for-profit would “undermine” the firm’s 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, it created its current structure, taking on outside investments from VCs and companies including Microsoft.
Today, OpenAI has a for-profit org controlled by a nonprofit with a “capped profit” share for investors and employees. But in a blog post published Friday, 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.
Musk filed for a preliminary injunction to halt the company’s transition to a for-profit, which has long been in the works, late in November. He accuses OpenAI of abandoning its original philanthropic mission to make the fruits of its AI research available to all, and of depriving rivals including Musk’s xAI of capital through anticompetitive tactics.
OpenAI has called Musk’s complaints “baseless” and simply a case of sour grapes.
Facebook’s parent company and AI rival, Meta, is also supporting efforts to block OpenAI’s conversion. In December, Meta sent a letter to California attorney general Rob Bonta, arguing that allowing the shift would have “seismic implications for Silicon Valley.”
Lawyers for Encode said that OpenAI’s 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.’
“OpenAI’s 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,” Encode’s 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 AI’s impacts. Encode has contributed to various pieces of AI state and federal legislation in addition to SB 1047, including the White House’s AI Bill of Rights and President Joe Biden’s Executive Order on AI.
