SACRAMENTO, Calif. (Diya TV) — The California Attorney General’s office is investigating OpenAI’s reported plans to transition from a nonprofit to a for-profit entity, raising concerns over the future of its charitable assets.
In a letter sent on December 6, Deputy Attorney General Christopher Lamerdin questioned how OpenAI intends to transfer assets and its plan to restructure. The inquiry highlights clauses in OpenAI’s founding documents, which state that its assets are irrevocably dedicated to charitable purposes.
The investigation comes after reports that OpenAI is considering transferring control of its core business to a new for-profit public benefit corporation. The company has not confirmed whether it will proceed with this transition, but it has acknowledged exploring the shift. Founded in 2015, OpenAI was originally a nonprofit with a mission to develop artificial general intelligence for the benefit of humanity. However, it later created a for-profit arm to attract investors and fund expensive AI research.
The move has sparked controversy, with critics arguing that allowing OpenAI to repurpose its nonprofit assets for profit could set a dangerous precedent. Meta and other consumer advocacy groups have urged the California Attorney General to halt the restructuring, citing potential tax abuses and unfair advantages.
Public Citizen, a nonprofit consumer advocacy group, has also voiced concerns, calling on regulators to ensure any for-profit entity taking control of OpenAI compensates the nonprofit appropriately.
As of January 8, OpenAI had not responded to the Attorney General’s request for more details.
