Encode Joins Forces with Musk to Oppose OpenAI’s Shift to Profit-Driven Model
“The public has a significant interest in having this technology governed by a public charity that is legally committed to prioritizing safety,” states the brief.
Encode, an organization advocating for artificial intelligence (AI), has submitted a brief supporting Elon Musk’s recent lawsuit against OpenAI. They contend that the shift towards a for-profit model could jeopardize the public interest.
In the brief, Encode describes itself as “a youth-led organization advocating for safe and responsible artificial intelligence (AI)” with “a network of over 1,000 volunteers across 40 countries.”
The brief asserts, “If the world is indeed on the verge of a new era of artificial general intelligence (AGI), then the public has a critical interest in ensuring that this technology is managed by a public charity legally bound to prioritize safety and public benefit, rather than an entity focused on generating profit for a select few investors.”
According to Encode, OpenAI CEO Sam Altman has acknowledged that AI presents significant risks to humanity. Altman joined numerous notable figures, including Nobel Prize winners, in signing a statement asserting that “mitigating the risk of extinction from AI should be a global priority.”
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People globally are already facing issues from AI technologies, including disinformation, algorithmic bias, job displacement, and threats to democracy, making the safeguarding of AI an “urgent, immediate concern,” stated the advocacy group.
Currently, OpenAI operates a capped-profit subsidiary that is fully overseen by the OpenAI nonprofit parent organization, which is expected to safeguard the responsible use of AGI.
In Delaware, where OpenAI is incorporated, the boards of nonprofit charitable organizations have fiduciary responsibilities toward their beneficiaries, which in this context would be “humanity,” Encode noted.
By shifting operations to a Delaware public benefit corporation (PBC), OpenAI’s focus would change from maintaining the “safety of advanced AI” to prioritizing shareholder interests. Allowing this transition would be detrimental to public interest, according to the brief.
“The PBC is a structure used by many organizations that mandates the company to balance the interests of shareholders, stakeholders, and public benefits in its decision-making processes,” the post stated.
OpenAI’s Intentions and Musk’s Controversy
OpenAI started as a research lab in 2015, aiming to advance AI in a manner “most likely to benefit humanity as a whole, devoid of the need to generate financial returns,” according to the post. Out of the initial $137 million in donations, less than one-third was contributed by Musk.
As OpenAI’s management recognized that the project would require “far more capital,” they established the current for-profit structure under the control of the nonprofit to attract funding from investors.
OpenAI stated that the new PBC “will oversee and manage OpenAI’s operations and business, while the nonprofit will appoint a leadership team and staff to pursue charitable projects in fields such as healthcare, education, and science.”
“In 2017, Elon not only wanted but actually initiated a for-profit structure as OpenAI’s proposed new model. When he did not achieve majority ownership and complete control, he exited and claimed that we would fail,” the company stated.
“Now that OpenAI stands as the leading AI research facility and Elon leads a competing AI enterprise, he is asking the court to prevent us from effectively fulfilling our mission.”
The Epoch Times reached out to Musk for a comment but did not receive a response by the time of publication.
In addition to ethical issues, Musk claimed in the complaint that OpenAI and its investor Microsoft control around 70 percent of the generative AI market and engage in “anticompetitive behavior.”
According to the complaint, OpenAI and Microsoft prevent investors from supporting OpenAI’s competitors, particularly Musk’s AI company xAI.
“OpenAI’s transition from a nonprofit to a for-profit giant is fraught with clear anticompetitive practices, blatant violations of its charitable mission, and widespread self-dealing,” the complaint noted.
xAI was established in July 2023. The company unveiled the Grok-1 AI model on the X social media platform a few months later, in November 2023, and has rolled out updates to the tool since.
