Neil Elan recently spoke to the Los Angeles Times about the coalition of more than 50 nonprofits, foundations, and labor groups in California who are raising concerns about artificial intelligence startup OpenAI’s plans to restructure itself as a for-profit company. The group, led by LatinoProsperity and the San Francisco Foundation, signed a petition directed to the state’s Attorney General Rob Bonta to request that he investigate the startup this week.
In 2023, the OpenAI board was restructured after it voted to fire co-founder and CEO Sam Altman and reinstated him five days later, leading several opposing members to resign. This month, OpenAI raised $40 billion led by SoftBank, which raised its total value to $300 billion. However, SoftBank has the right to reduce its investment if OpenAI does not change its corporate structure by the end of the year as part of the deal.
Neil explains that a nonprofit’s use of funds raised is limited, unlike for-profit companies.
“They can’t sell stock or offer returns,” Neil tells the LA Times. “Equity is what drives a lot of these high valuation models. It’s also difficult to fully compete with Meta, Microsoft and Google, which have access to a lot more resources ... without comparable funding.”
