Elon Musk criticizes OpenAI’s potential move from non-profit to for-profit structure

Elon Musk has criticized OpenAI after it was reported that the company would be restructuring from a “non-profit into a for-profit” model. The billionaire called the potential move “illegal,” after reports emerged that the ChatGPT-maker is working on a plan to transition its core business into a for-profit benefit corporation.

Posting on X, the platform’s CEO said: “You can’t just convert a non-profit into a for-profit. That is illegal.”

You can’t just convert a non-profit into a for-profit. That is illegal. https://t.co/kJkHyudT8K

— Elon Musk (@elonmusk) September 26, 2024

According to CNBC, a source said the company will retain its non-profit segment as a separate entity and that talks are ongoing. They added that the structure would be more straightforward for investors and would make it easier for OpenAI employees to recognize liquidity.

OpenAI CEO Sam Altman is set to receive equity in the for-profit company for the first time, which following the restructuring and efforts to remove the cap on investor returns, could be valued at $150 billion, according to sources.

Cited by Reuters, an OpenAI spokesperson said: “We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist.”

ReadWrite reported in June that Musk dropped a lawsuit against Altman and OpenAI after claiming that the company’s transformation into a profit-focused entity, which aligned with Microsoft and restricted public access to its technologies, breached its commitment to creating artificial intelligence for the benefit of humanity.

The news comes as the firm’s Chief Technology Officer Mira Murati announced her departure on Wednesday (Sept. 25) after six and a half years at the company. Last November, Murati was named interim CEO for a brief period after Altman was ousted from the company. However, he was quickly reinstated and the board was mostly replaced.

She has published a statement on X, saying, “After much reflection, I have made the difficult decision to leave OpenAI.

“There’s never an ideal time to step away from a place one cherishes, yet this moment feels right.”

I shared the following note with the OpenAI team today. pic.twitter.com/nsZ4khI06P

— Mira Murati (@miramurati) September 25, 2024

On the same day, Altman revealed that research chief Bob McGrew and Barret Zoph, a research vice president, were also leaving. He wrote on X: “When Mira informed me this morning that she was leaving, I was saddened but of course support her decision.”

Altman went on to write: “I also want to share that Bob and Barret have decided to depart OpenAI. Mira, Bob, and Barret made these decisions independently of each other and amicably, but the timing of Mira’s decision was such that it made sense to now do this all at once, so that we can work together for a smooth handover to the next generation of leadership.”

I just shared this with OpenAI: pic.twitter.com/1gTCbigdsS

— Bob McGrew (@bobmcgrewai) September 26, 2024

McGrew also took to the social media platform to say OpenAI has “become the most important research and deployment company in the world.” He said he would be taking time away for himself, and that Mark Chen will lead the research team.

I posted this note to OpenAI.

Hey everybody, I have decided to leave OpenAI.

This was a very difficult decision as I have has such an incredible time at OpenAI. I got to join right before ChatGPT and helped build the post-training team from scratch with John Schulman and…

— Barret Zoph (@barret_zoph) September 26, 2024

Zoph added that it was a “natural point for me to explore new opportunities outside of OpenAI.” He said that the “post-training team has many talented leaders and is being left in good hands.”

Update: An OpenAI spokesperson told ReadWrite at 7 am EST / 12pm BST: “We remain focused on building AI that benefits everyone and as we’ve previously shared we’re working with our board to ensure that we’re best positioned to succeed in our mission. The nonprofit is core to our mission and will continue to exist.”

Featured image: Canva / U.S. Air Force / Trevor Cokley / TechCrunch

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