Can Humanity Survive OpenAI?
You Can't Just Abandon Your Purpose" — Legal Experts Challenge OpenAI's Conversion Strategy. Corporate AGI is just the first stunning step to its AI Supremacy.
Today’s guest post is an important deep dive into OpenAI’s Conversion Strategy of its business structure. At a later date it will be published as a stand-alone piece, without the context of this introduction.
OpenAI has raised a total of approximately $57.9 billion in funding over 11 rounds since its founding in December 2015. This makes it the most heavily funded AI company in the world with a significant centralization of power.
OpenAI has been called a generational company1, but what will the ChatGPT Titan become exactly? What will it need to do, even just to survive2.
The rivalry between Elon Musk and Sam Altman and the companies we know today as OpenAI and xAI might grow into being fairly dangerous clash for the future of artificial intelligence. There are some legal and business affairs I want you all to understand more deeply.
OpenAI is working on a Twitter Clone
Guys this is not a meme, or an exercise in napkin math, in late March, 2025 Elon Musk said X, formerly Twitter, had been acquired by xAI. On April 15th, the Verge broke the story that OpenAI is working on its own X-like Social network.
Aggressive scaling and acquisition plans
On April 16, Bloomberg fist reported that OpenAI is in talks to acquire Windsurf (formerly Codeium) for $3 Billion, a notable “vibe coding” platform. Also on April 16th, OpenAI released o3 and o4-mini. These new reasoning models can “agentically use and combine every tool within ChatGPT—this includes searching the web”, etc…
Clashes of the titans of America
Elon Musk and Sam Altman are now billionaires with some of the biggest funding capabilities of technology startups or AI startups, in history. What OpenAI is doing in AI Infrastructure alone is unprecedented. But OpenAI is virtually unrecognizable from the AI startup it used to be. What they will build could be powerful enough to disrupt the magnificent seven, BigTech in Silicon Valley as we know them, outside of Google’s stellar suite of AI products and leading large language model efforts. But the perversity OpenAI’s evolution is also mirrored in complicated legal issues and controversy of prioritizing commercial interests over the “benefitting of all of humanity.”
OpenAI’s race to change its Business Structure
The stakes are high for OpenAI, which needs to complete its for-profit conversion by the end of this year or next, or it will risk relinquishing some of the capital it has raised in recent months. It’s the race to alter its entire Mission. You might recall, OpenAI was founded as a non-profit in 2015. It turns out, a lot can change in a decade and ChatGPT was only released approximately 2.5 years ago.
This new structure will give the for-profit arm of OpenAI much more control. Under the proposed structure, the public benefit corporation, which is a for-profit corporate entity, will run and control OpenAI’s operations and business.
On April 11th, a group of ex-OpenAI employees on filed a proposed amicus brief in support of Elon Musk in his lawsuit against OpenAI, opposing the company’s planned conversion from a nonprofit to a for-profit corporation.
“Generative AI as a massively disruptive sector required an unprecedented amount of proprietary resources and with it came a centralization of power that is the OpenAI we know today along with a “180 on all things AI Safety.”
According to the Financial Times, OpenAI gave some testers less than a week for safety checks for an upcoming major launch.
An organization OpenAI frequently partners with to probe the capabilities of its AI models and evaluate them for safety, Metr, suggests that it wasn’t given much time to test o3.
Another of OpenAI’s third-party evaluation partners, Apollo Research, also observed deceptive behavior from o3 and the company’s other new model, o4-mini.
In fact, OpenAI updated its safety framework—and no longer sees mass manipulation and disinformation as a critical risks worth negating.
The exodus of AI governance, alignment and policy staff (talent) at OpenAI was a clear break from its past ideology with potentially irrevocable consequences. American corporations are conducting themselves with high-risk policies according to AI governance experts in an AI arms-race to dominate the future.
But as layoffs and entry level software engineers jobs dry up, is automating the future of coders a healthy goal in the first place?
“Some of the most powerful and well-funded organizations in history are trying to build systems that would make humanity obsolete. It's far from clear that they will succeed, but regardless, these companies and the people running them should be critically examined as part of a broader project to collectively understand and govern the development of advanced artificial intelligence.” - Garrison Lovely (in about section of Obsolete)
The Betrayal of its original Mission
The brief, filed by Harvard law professor and Creative Commons founder Lawrence Lessig, names 12 former OpenAI employees: Steven Adler, Rosemary Campbell, Neil Chowdhury, Jacob Hilton, Daniel Kokotajlo, Gretchen Krueger, Todor Markov, Richard Ngo, Girish Sastry, William Saunders, Carrol Wainwright, and Jeffrey Wu.
“If the OpenAI Nonprofit agreed to a change in the OpenAI corporate structure which took away its controlling role, that would fundamentally violate its mission,” a filing on last Friday said.
In a nutshell:
OpenAI was founded as a nonprofit in 2015, but it converted to a “capped-profit” in 2019, and is now trying to restructure once more into a PBC. When it transitioned to a capped-profit, OpenAI retained its nonprofit wing, which currently has a controlling stake in the organization’s corporate arm.
Musk’s suit against OpenAI accuses the startup of abandoning its nonprofit mission.
Musk had sought a preliminary injunction to halt OpenAI’s conversion.
I propose that what OpenAI and xAI becomes could make a lot of the internet we know today, obsolete.
In some ways we are already seeing evidence of this. (e.g. Elon Musk weaponizing X for political agendas, etc…)
To decode all of this let’s turn to investigative journalist and whistleblower
.Garrison is the author of the forthcoming book called
Obsolete: Power, Profit, and the Race to Build Machine Superintelligence.
He once wrote an article Can Humanity Survive AI, but I wonder if it can survive OpenAI3. Silicon Valley has a way of breaking you down and building you up into the venture capitalist mould and highly mutable (think opportunistic) Tycoon that Sam Altman has become.
Obsolete Newsletter does reporting and analysis on capitalism, the great power competition and the race to build machine superintelligence. File this one under our AGI section and OpenAI.
Garrison explains:
Obsolete 💾
Garrison has written about OpenAI before, here, here and here.
Given the extensive research he’s been doing for his book, I consider him an expert on OpenAI’s history and legal issues and the crucial months ahead for the company. When your Head of Preparedness steps down, yep we do take notice! Google sees itself hiring a “post-AGI” research scientist so who knows what is going on at this rate. The early idealism of Generative AI of the 2015 to 2020 period, has already nearly entirely faded as OpenAI and Anthropic are now the new duopology of AI in the United States that will bag most of the revenue from the hype cycle.
"The Profit Motive is Winning": OpenAI's Philanthropic Gambit Faces Criticism
Here is a key quote from the brief:
“OpenAI committed to several key principles for executing on [its] mission in their charter document,” the brief reads. “These commitments were taken extremely seriously within the company and were repeatedly communicated and treated internally as being binding. The court should recognize that maintaining the nonprofit’s governance is essential to preserving OpenAI’s unique structure, which was designed to ensure that artificial general intelligence benefits humanity rather than serving narrow financial interests.”
Garrison Lovely4 is not an ordinary freelance journalist, he’s a Reporter in Residence at the Omidyar Network. He lives in Brooklyn and in addition to covering AI, he’s written about psychedelics, prisons, emerging technologies, philosophy, fish welfare, management consulting, police alternatives, and more. He’s also conducted interviews with Michael Stipe of REM and Conor Oberst of Bright Eyes. He has an exceedingly strong grounding in investigative journalism, so his reporting is like looking into a crystal lake.
With that, let’s get into Garrison’s deep dive:
(I really lucked out getting Garrison to agree to share this piece with us):
TL:DR try the audio version: 23:04
Inside OpenAI's Controversial Plan to Abandon Its Nonprofit Roots
By
, April 16th, 2025.Former employees, legal experts, and philanthropic leaders challenge the company's effort to shed nonprofit control
Earlier this month, OpenAI announced that it aspires to build "the best-equipped nonprofit the world has ever seen" and was convening a commission to help determine how to use its "potentially historic financial resources."
But critics view this new commission as a transparent attempt to placate opposition to its controversial plan to restructure fully as a for-profit — one that fails to address the fundamental legal issues at stake.
OpenAI is currently a $300 billion for-profit company governed by a nonprofit board. However, after an earlier iteration of that board briefly fired CEO Sam Altman in November 2023, investors reportedly began demanding that the company shed its quasi-nonprofit status.
"The story of OpenAI's history is trying to balance the desires to raise capital and build the tech and stay true to its mission," a former OpenAI employee told me. The current move, they say, is an attempt to "separate these things" into a purely commercial entity focused on profit and tech, alongside a separate entity doing "altruistic philanthropic stuff."
"That's wild on a number of levels because the entire philanthropic theory of change here was: we're going to put guardrails on profit motives so we can develop this tech safely," the former employee says.
Best newsletter pieces - Obsolete
“End of an Era”: OpenAI’s AGI Readiness Chief Resigns and Team is Disbanded
Why Did Elon Musk Just Offer to Buy Control of OpenAI for $100 Billion?
What the Headlines Miss About the Latest Decision in the Musk vs. OpenAI Lawsuit
Is the AI Doomsday Narrative the Product of a Big Tech Conspiracy?
Legal hurdles
The for-profit conversion faces significant unresolved legal challenges, including a lawsuit from Elon Musk arguing that his $44 million donation was contingent on OpenAI remaining a nonprofit and that the conversion would violate its founding charitable purpose. The case will go to trial this fall. The conversion can also be challenged by the California and Delaware Attorneys General (AGs), who are reportedly each looking into the case.
Historical Timeline:
Created in Datawrapper, April 17th, 2025.
Musk's suit, OpenAI's gargantuan valuation, and the unprecedented nature of the conversion attempt have attracted scrutiny.
Without mentioning OpenAI explicitly, California Assembly Member Diane Papan introduced a bill in February that would have blocked the conversion. However, the legislation was amended without explanation earlier this month to instead focus on aircraft liens. Papan's office has not replied to a request for comment.
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