OpenAI shift to for-profit firm could lead to corner cutting, whistleblower says

OpenAI’s plans to become a for-profit company have made a whistleblower worried that the firm could begin cutting corners on safety. Plus, the whole project just seems incredibly complex.

The AI start-up aims to restructure its core business model into a for-profit entity in order to reassure current and future investors.

OpenAI is negotiating a new $6.5 billion financing round that would value the company at $150 billion, but that’s contingent on the firm upending its corporate structure. That might be the reason three top technical leaders, including chief technology officer Mira Murati, left the company last week.

The project is also the reason William Saunders, a former research engineer at OpenAI, is speaking out about his concern that the company is moving this particular way and that Sam Altman, the CEO, would hold a hefty stake in the restructured business.

“I’m most concerned about what this means for governance of safety decisions at OpenAI,” Saunders told The Guardian. “If the non-profit board is no longer in control of these decisions and Sam Altman holds a significant equity stake, this creates more incentive to race and cut corners.”

OpenAI was founded as a non-profit entity committed to benefiting “all of humanity.” But Saunders believes that the race to build more powerful AI tech could ignore safety concerns.

Besides, according to the whistleblower who testified in the US Senate earlier in September, removing limits on profit would signal that OpenAI no longer cares about humanity first and foremost.

It’s important, though, that OpenAI will probably restructure as a public-benefit corporation. Yes, it has no caps on its profits but it still is committed to making a positive impact on society.

But, as The Wall Street Journal puts it, the whole process is going to be very difficult anyway. OpenAI must within two years become a public-benefit corporation and, in the meantime, deal with regulatory requirements, determine how to actually avert equity, and split assets with the non-profit entity which will continue to exist.

Some observers of the industry are more than unconvinced with what’s been going on at OpenAI, a company that was shaken by a boardroom drama in late 2023 when Altman was briefly ousted as the CEO.

“Wait, what? Murati is leaving, Schulman left, Karpathy left, Ilya left, Leike left, Brockman is on leave, perhaps a dozen others left, GPT-5 hasn’t dropped, Sora hasn’t shipped, the company had an operating loss of $5 billion last year, there is no obvious moat, Meta is giving away similar software for free, many lawsuits pending, and people are valuing this company at $150 billion?” said Gary Marcus, author of the book “Taming Silicon Valley.”