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California and Delaware Attorneys General Open Investigations into OpenAI Restructuring Plan

The proposed shift from nonprofit oversight to a public benefit corporation sparks scrutiny over its impact on AI governance and mission alignment.

Sam Altman of OpenAI looks perplexed by employee backlash

Overview

  • OpenAI faces formal investigations by California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings into its proposed restructuring plan.
  • The company's December 2024 proposal seeks to convert its capped-profit subsidiary into a public benefit corporation, transferring control from its nonprofit arm.
  • Critics, including AI experts and former OpenAI researchers, warn the move could weaken safeguards ensuring artificial general intelligence (AGI) benefits humanity.
  • A $40 billion funding round finalized in March ties investor withdrawal rights to the restructuring, with up to $20 billion at risk if the plan fails by year-end.
  • Elon Musk’s legal challenge to block the restructuring continues, though his March injunction bid was denied due to lack of standing.