Pearl River In these dark days of rage, it’s easy to lose track of some of the other outrages that are out there. We’ve looked at this issue before, but maybe it’s time to look again. I’m not simply talking about artificial intelligence. I imagine we’ll be looking at that issue forever and a day at this point.
No, I’m talking about the get-rich schemes at OpenAI, the ChatGPT outfit, that was established as a California nonprofit to develop AI for the public good to ensure no harm from its development and application, and now wants to convert to a for profit to make it possible to cash out and top off for its leaders and investors. Elon Musk has opposed the conversion, as one of the original founders of OpenAI, but his motivations are more competitive than pure, but, as the saying goes, even a broken clock is right two times a day. A story in Wired does a better job of identifying the real fight here, which may not stop the conversion, but at least may guarantee no rip-offs or devaluations of the benefits that could come to the public for the years of benefits OpenAI received as a charity.
Sam Altman is somewhat the villain of this story, the fired and rehired CEO of OpenAI, and unquestioned driver of this conversion plan. One of the heroes of the pushback seems to be Orson Aguilar and his nonprofit, LatinoProsperity. He correctly understands that ChatGPT could be key in the future for creating wealth and wanted to spread it around. He contacted executives he knew at the San Francisco Foundation, a community foundation of sorts which has supported many organizations in the Bay Area as well as social justice organizations, including ACORN. One of the execs, Judith Bell, had previously been part of the fight with the Consumers Union and a coalition of other groups over the conversions of nonprofit health insurers like Blue Cross Blue Shield, which led to the $15 billion dollar development of three of the state’s biggest independent foundations by assets—the California Endowment, California Wellness Foundation, and the California Health Care Foundation.
Aguilar and this crew formed a new coalition to ensure that not a penny of evaluation is lost in any conversion and that the new OpenAI is independent. The latest evaluation of OpenAI put its worth at $300 billion, but 75% of the investments, which are now have any returns capped, are contingent on the conversion. Meetings between the parties have been held, but “core questions about the amount of funding and independence OpenAI would afford to the charitable arm” remain unresolved. Altman and OpenAI have reacted by creating an advisory committee, but having seen what other tech advisory groups have been like the one Facebook created at one point to look at its safety precautions, Aguilar is skeptical that the nonprofit financed by the conversion would be independent. One that was still under the thumb of those cashing out might very likely treat the distributions by the nonprofit of billions of dollars as a captive, making its distributions and grants fungible within the purposes of the for profit and allowing shifting of some of its costs to the nonprofit.
A stand alone, nonprofit foundation with resources that would certainly dwarf the $15 billion in the health foundations, perhaps hitting as high as $50 billion, that would fund other nonprofits and their technical needs and ability to utilize AI, would be huge with the payout provisions mandated currently putting billions annually into the sector. The coalition is engaging attorneys general in both California and Delaware now. It’s a righteous fight and could mean a lot for future sustainability and competitiveness for nonprofit organizations everywhere, so we need to win this one.