Tesla founder Elon Musk has described AI startup OpenAI’s restructuring plan as “the scam of the century.” He made this comment in reaction to an open letter criticizing the restructuring plan by legal and AI experts.
The letter from Not for Private Gain had asked the Attorneys General of California and Delaware to protect OpenAI’s core mission as a non-profit.
It said:
“We write in opposition to OpenAI’s proposed restructuring that would transfer control of the development and deployment of artificial general intelligence (AGI) from a non-profit charity to a for-profit enterprise.”
Signatories to the letter who include three Nobel Prize winners, corporate governance experts,machine learning researchers, and former OpenAI staff questioned why the startup is focused on AGI when its mission is to benefit all of humanity.
Thus, they noted the narrow focus on developing AGI and the plan to transfer the control of AGI development from its non-profit arm to the profit enterprise will damage its core charitable purposes.
The letter further explained that the latest restructuring could potentially violate OpenAI’s founding agreement and contravene its Certificate of Incorporation. Thus, they want the Attorneys General to ask OpenAI to explain how its planned restructuring will advance its charitable purpose and also ensure the non-profit retains control of AI development.
Musk’s history of OpenAI criticisms
Musk’s endorsement of the letter is unsurprising. The Tesla founder is one of the co-founders of OpenAI but left the board in 2018 due to a disagreement and has been critical of the startup since then.
However, his criticism has grown stronger since OpenAI achieved significant success as a generative AI pioneer. The billionaire is especially critical of OpenAI’s partnership with Microsoft.
He believes the deal gives Microsoft too much control over OpenAI’s technology, including GPT models, and contravenes the company’s founding principles as a non-profit.
In fact, Musk filed a lawsuit in early 2024 claiming that OpenAI’s board and leadership had transformed the company into a profit-driven business, thereby violating its original charter.
The billionaire also established xAI, his own AI startup in response to OpenAI but that did not stop him from reportedly offering over $90 billion to buy control of OpenAI’s non-profit arm a few months ago.
OpenAI’s CEO, Sam Altman, rejected the offer and even joked about buying X (formerly Twitter) in return. In response, Musk called Altman a “swindler” and shared a meme video calling him “Scam Altman.”
Stakeholders worried about OpenAI’s focus on profits
However, it is not only Musk who is against OpenAI’s profit-driven approach and the shift away from its charitable origins. Rose Chan Loui, an expert in non-profit law, said in a podcast that the reforms at OpenAI could place it in legal danger if they affect its non-profit status.
Geoffrey Hinton, commonly called the “Godfather of AI,” also agreed with Musk that AI should be developed with the public in mind, and not for profit alone. He believes that if the likes of OpenAI focus solely on profit in developing AI, it would spell catastrophe for the future of AI.
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