Did OpenAI keep its word a year after restructuring?

It’s been one year since OpenAI struck a deal with the Attorneys General of California and Delaware that let it restructure its corporate governance and get on a path to an IPO.

That agreement, codified in a memorandum of understanding (MoU) signed with California AG Rob Bonta, left the original OpenAI nonprofit (now the OpenAI Foundation) in control of the new for-profit public benefit corporation (PBC).

Baked into the arrangement is a structural conflict of interest. The Foundation and the PBC are governed by two boards made up of almost entirely the same people. While the nonprofit’s primary responsibility is its charitable mission (to ensure AI benefits all of humanity), the PBC is heavily incentivized to prioritize maximizing returns for investors. These overlapping board members are supposed to ensure the nonprofit mission remains the driving governance principle even as they seek higher valuations for the PBC.

With that setup, it was never realistic to expect OpenAI to put its nonprofit mission ahead of profits, even though the agreement and the law require it. OpenAI’s behavior over the past year has proven the point.

So the EyesOnOpenAI Coalition, led by TechEquity, checked their work and assigned them a grade. Below are the subjects OpenAI is responsible for under the law and the terms of the MoU.  

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