Close The Bait-And-Switch
Nonprofit Loophole
The Coalition for Artificial Intelligence Nonprofit Integrity (CANI) – which includes researchers, consumer advocates, nonprofits, and community leaders – is advocating to preserve nonprofit integrity by ending the exploitation of our state’s nonprofit law.
Close The Nonprofit Loophole
California law has an unintentional loophole that allows startup venture capital nonprofits to attract top talent and contributors in artificial intelligence to support their stated altruistic mission with the secret intention of transitioning to a for-profit corporation once valuable products and services exist.
Current Law
Provides an unfair advantage to beat or even eliminate competition
Concentrates a huge financial advantage into the hands of a few versus those who contributed and supported the nonprofit
Weakens trust in nonprofits with little to hold them accountable to their original stated mission
OpenAI's False
Promises
OpenAI is an example of a startup venture capitalist nonprofit attempting to pull a bait-and-switch by exploiting a legal loophole to convert to a for-profit and win the race to develop AGI (Artificial General Intelligence) and unduly concentrate power in the hands of a few.
Startup Venture Capital Nonprofits Must Be Held Accountable
OpenAI: A Prime Example of Diversion of California Nonprofit Law and Breach of Public Trust
OpenAI was established 10 years ago with a legally-binding commitment that when it builds Artificial General Intelligence, a powerful AI technology capable of displacing humanity, this technology would belong to humanity rather than serve private interests. This commitment was central to attracting both world-class AI researchers and $134 million in charitable seed donations. Internal communications reveal that OpenAI's executives strategically positioned their nonprofit structure and humanitarian mission as a recruitment tool to assemble critical talent—talent that would have otherwise remained at for-profit entities. Without the commitment that the powerful AI technology that OpenAI is building would belong to humanity, and the structure of a non-profit – OpenAI would not exist.
Now, as OpenAI approaches the development of Artificial General Intelligence—technology with the potential to transform the labor economy—the organization is reneging on its promise. After a brief dismissal and controversial reinstatement, a single executive has replaced the board with allies and appears to be orchestrating a fundamental conversion from nonprofit to for-profit under his control.
This maneuver represents more than an organizational restructuring; it's a breach of trust with donors, researchers, and the AI community who trusted OpenAI to carry on its mission – as well as with all of humanity who are enshrined in OpenAI's charter.
Because OpenAI is building Artificial General Intelligence, which by its nature could displace humanity from the economy, transferring this asset from a non-profit whose sole fiduciary responsibility is to all of humanity and whose sole mission is to build AGI safely to benefit all of humanity to for-profit controlled and owned by a few individuals on the verge of creating this powerful technology has profound implications. Some experts have characterized this transition as "the greatest theft of the millennia if not of human history." What was created as a safeguard for humanity's collective future now risks becoming a privately controlled asset with unprecedented economic and political power that would be used to serve the interests of the few.
“ OpenAI has made a mockery of nonprofit status for years. They should not be allowed to do so, and should not set a precedent for others to do the same. ”
Gary Marcus
Professor Emeritus, NYU
“ It's complete nonsense that this idea of using non-profit status for profit is allowed to happen. ”
Keith Williams
Concerned Citizen