OpenAI Foundation

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📊 25📈 0🔗 23📚 186•21%Score: 13/15

LLM Summary:The OpenAI Foundation holds 26% equity (~\$130B) in OpenAI Group PBC with governance control, but detailed analysis of board member incentives reveals strong bias toward capital preservation over philanthropic deployment. Of nine board members, only two (Desmond-Hellmann, Seligman) have meaningful nonprofit experience, while four (Taylor, Summers, Ogunlesi, Altman) have direct financial conflicts favoring stock appreciation. Base case spending projection is \$3-8B over 10 years (2-6% of stake), far below the \$25B pledge. Includes cost-effectiveness analysis of pressure strategies, finding advocacy may be among the most leveraged philanthropic opportunities at ~\$0.0001/\$ deployed.

Critical Insights (4):

NeglectedThe foundation's Safety and Security Committee consists of only four part-time volunteers with no dedicated staff, tasked with overseeing development of potentially transformative AGI systems.S:3.5I:4.0A:3.5
NeglectedThe OpenAI Foundation holds $130 billion in equity but faces a fundamental incentive problem: selling shares to fund philanthropy would depress the stock price, creating pressure to hold assets indefinitely rather than deploy them for charitable purposes.S:3.0I:3.5A:3.0
ClaimEight of nine OpenAI Foundation board members also serve on the for-profit board, creating structural conflicts where the same individuals oversee both commercial success and public benefit obligations.S:2.5I:3.5A:3.0

Quick Assessment

Aspect	Description
Structure	Nonprofit foundation holding 26% equity in for-profit OpenAI Group PBC
Valuation	$130 billion stake at $500B+ OpenAI valuation (October 2025)
Governance Rights	Appoints all board directors of OpenAI Group; can replace them at any time
Initial Commitment	$25 billion focused on health/curing diseases and AI resilience
Established	October 28, 2025 (restructured from original 2015 nonprofit OpenAI, Inc.)
Key People	Bret Taylor (Board Chair), Sam Altman (CEO), nine other board members
Comparison	Similar to Anthropic’s Long-Term Benefit Trust but with direct equity ownership vs. pledge-based control

Key Links

Source	Link
Official Website	openai.com/foundation
Structure Details	openai.com/our-structure
Wikipedia	en.wikipedia.org/wiki/OpenAI

Foundation At A Glance: Master Summary

This table provides a comprehensive overview of the OpenAI Foundation’s structure, governance, spending trajectory, and accountability mechanisms.

Category	Key Facts	Assessment
Assets	$130B equity stake (26% of OpenAI at $500B valuation)	Paper wealth only; shares illiquid until IPO (2026-27)
Announced Commitment	$25 billion for health + AI resilience	No timeline; vague language creates no binding obligation
Actual Spending (2025)	$50 million (People-First AI Fund)	0.04% of assets — far below 5% private foundation minimum
Legal Classification	Unclear (filed Form 990, not 990-PF)	If public charity, no mandatory payout requirement
Board Composition	9 members; 8 also serve on for-profit board	Only 2 have philanthropic experience; 4 have high financial conflicts
Governance Control	Appoints all OpenAI Group board members	Can remove directors at any time; retains ultimate control
Competitor Stake	Microsoft holds 27% (larger than foundation)	Microsoft has no philanthropic obligation; commercial interests dominate
IPO Timeline	Filing H2 2026; listing 2027	Foundation faces lockup periods, insider restrictions post-IPO
Profitability	OpenAI projects profitability by 2030	$9B losses in 2025; $47B peak cash burn in 2028
Valuation Risk	$207B funding shortfall (HSBC estimate)	If AI bubble deflates, foundation wealth could evaporate

Spending Projection Summary

Scenario	10-Year Spending	% of $130B	Likelihood
Status Quo (current trajectory)	$500M - $1B	0.4-0.8%	High (60%)
Corporate Foundation (typical rate)	$2B - $5B	1.5-4%	Medium (25%)
5% Compliance (if private foundation)	$50B - $65B	38-50%	Low (10%)
Gates-Level (aggressive philanthropy)	$70B - $90B	54-69%	Very Low (5%)

Key Risk Factors

Risk	Description	Mitigation Potential
Share-Selling Disincentive	Selling depresses stock; foundation incentivized to hold indefinitely	Regulatory pressure for diversification
Board Conflicts	4 of 9 members have direct financial interest in OpenAI stock appreciation	Add independent directors
No Payout Requirement	May avoid 5% rule if classified as public charity	IRS classification challenge
Marketing Over Mission	Grants timed for PR value; avoid funding critical safety research	Independent grant review
Valuation Dependency	$130B exists only if OpenAI maintains value	Diversification; early liquidation

Pressure Mechanisms: Cost-Effectiveness

Mechanism	Est. Cost	Success Rate	Potential Impact	Cost per $1 Deployed
CA Attorney General	$500K	65%	$2-5B additional spending	$0.0001-0.00025
EyesOnOpenAI Coalition	$250K	50%	$1-3B additional spending	$0.00008-0.00025
Investigative Journalism	$150K	55%	$500M-2B additional spending	$0.00008-0.0003
Musk Lawsuit (ongoing)	N/A	45%	Precedent-setting	N/A
IRS Whistleblower	$50K	30%	$200M-500M additional spending	$0.0001-0.00025

Bottom Line: Advocacy for OpenAI Foundation accountability may be among the most cost-effective philanthropic opportunities available, with potential returns of $1,000-10,000 per dollar invested in pressure campaigns.

Overview

The OpenAI Foundation is a nonprofit organization that serves as the controlling entity over OpenAI Group PBC, the for-profit public benefit corporation developing advanced AI systems including ChatGPT and GPT-series models. Established through a major restructuring completed on October 28, 2025, the foundation holds a 26% equity stake in the for-profit entity valued at approximately $130 billion, making it one of the world’s most well-resourced philanthropic organizations.¹²

The foundation’s structure represents an attempt to balance OpenAI’s original nonprofit mission—“to ensure that artificial general intelligence benefits all of humanity”—with the capital requirements of developing cutting-edge AI systems. Through special voting and governance rights, the foundation appoints all members of OpenAI Group’s board of directors and can remove them at any time, maintaining ultimate control despite holding a minority equity position compared to Microsoft’s 27% stake.³⁴

The foundation has committed $25 billion initially across two priority areas: health and curing diseases (accelerating breakthroughs in diagnostics, treatments, and cures) and technical solutions for AI resilience (maximizing AI benefits and minimizing risks). In 2025, it launched the People-First AI Fund with an initial $50 million commitment to support nonprofits and mission-focused organizations.¹⁵

History and Restructuring

Original Nonprofit Formation (2015-2019)

OpenAI was founded on December 11, 2015, as a nonprofit research organization in Delaware by Sam Altman, Elon Musk, Greg Brockman, Ilya Sutskever, and others. The founding team pledged over $1 billion in total funding, with the explicit mission of advancing artificial general intelligence “unconstrained by a need to generate financial return.”⁶⁷ The nonprofit structure was designed to avoid private gain and prioritize humanity-wide AGI benefits.

The idea emerged from private “founding dinners” in 2015 attended by key figures from Silicon Valley, amid concerns about AI risks and the accelerating pace of AI development following breakthroughs like AlexNet. Early donors included Peter Thiel, Reid Hoffman, Amazon Web Services, and Infosys.⁸

Capped-Profit Subsidiary (2019-2025)

By March 2019, OpenAI recognized that achieving its goals would require substantially more capital than initially anticipated—“on the order of $10 billion” according to the organization’s own projections.⁹ This led to the creation of OpenAI LP, a “capped-profit” for-profit subsidiary under nonprofit control, where investor returns were capped at 100 times their investment.

This structure allowed OpenAI to secure major investments, including an initial $1 billion from Microsoft in 2019, while maintaining nominal nonprofit oversight. Microsoft secured broad rights to license and use OpenAI’s intellectual property, except for technology related to artificial general intelligence (AGI).¹⁰¹¹

However, the hybrid structure proved increasingly difficult to maintain as OpenAI’s valuation soared and the company required even more capital for infrastructure and computational resources. By 2024, OpenAI’s reported valuation had reached approximately $500 billion, making it effectively impossible for a for-profit entity to purchase the nonprofit arm’s assets at fair market value, as would typically be required for a full conversion.¹²

Public Benefit Corporation Restructuring (2025)

On October 28, 2025, OpenAI completed a comprehensive restructuring that transformed the organization into two distinct entities:

OpenAI Foundation (nonprofit) - Holds 26% equity in the for-profit entity with special governance rights
OpenAI Group PBC (for-profit public benefit corporation) - Operates the business while maintaining mission alignment

The restructuring was approved by the California and Delaware Attorneys General after extensive negotiations. California AG Rob Bonta imposed 20 requirements for safety and security to remain under nonprofit control, while Delaware AG Kathy Jennings issued a non-objection statement contingent on fair valuation.¹³¹⁴

Under the new structure, equity distribution is as follows:

OpenAI Foundation: 26% ($130 billion at October 2025 valuation)
Microsoft: 27% ($135 billion)
Employees and early investors: 26%
Recent investors (SoftBank, others): 15%
Other investors: 6%¹⁵

The foundation also secured a warrant allowing it to receive additional shares if OpenAI Group’s valuation increases more than tenfold (to approximately $5 trillion) after 15 years, positioning the foundation as “the single largest long-term beneficiary of OpenAI’s success.”¹⁶

Governance Structure

The OpenAI Foundation’s governance power derives not from majority ownership but from special voting and governance rights that allow it to appoint all members of the OpenAI Group PBC board of directors and remove them at any time.¹⁷ This structure is intended to ensure that the for-profit entity remains aligned with the foundation’s mission even as it pursues commercial objectives.

Class N Shares vs. Equity: Understanding the Governance Mechanics

A common misconception is that the Foundation’s 26% equity stake is what gives it control. In reality, governance and financial ownership are legally separate:

Asset Type	What It Is	What It Does
Class N Common Stock	Special governance shares	Exclusive power to appoint/remove all PBC board members, block mission changes
26% Equity Stake	Ordinary shares worth ≈$130B	Financial interest only (dividends, sale proceeds, no voting power)

Why this matters for philanthropy: The Foundation can theoretically sell its entire 26% equity stake to fund charitable work without losing governance control. Random buyers of those shares would get no say in board appointments—governance power stays with whoever holds the Class N shares.

The problem: The Class N shares are controlled by the same 8 people who run the company:

Class N Shares (governance) ──owned by──► Foundation Board (8 people)
                                                │
26% Equity (financial) ──────owned by──► Foundation Board (same 8 people)
                                                │
OpenAI Group PBC ────────────run by────► 7 of those same 8 people

External capture vs. internal capture:

Risk	Structure’s Protection	Effectiveness
External capture (hostile shareholders take control)	Class N shares can’t be bought; governance stays with Foundation	Strong
Internal capture (board prioritizes profit over mission)	None—same people control both entities	None

The structure is clever legal engineering that protects against outsiders gaining control. But it does nothing to address the conflict of interest when the same tech/finance executives govern both the nonprofit mission and the for-profit company they personally benefit from.

A better design would separate the Class N shareholders from the for-profit beneficiaries—for example, having Class N shares held by an independent board with no financial stake in OpenAI (similar to what Anthropic’s Long-Term Benefit Trust attempts). OpenAI chose not to build this separation.

Board Composition

The foundation is governed by a board of directors chaired by Bret Taylor, former co-CEO of Salesforce and co-creator of Google Maps. The board consists of nine members:¹⁸

Bret Taylor (Chair) - CEO of AI startup Sierra
Sam Altman (CEO) - Co-founder of OpenAI
Adam D’Angelo - Co-founder and CEO of Quora
Sue Desmond-Hellmann - Former CEO of the Bill & Melinda Gates Foundation
Zico Kolter - Computer scientist; chairs the Safety and Security Committee
Paul M. Nakasone - Former Director of the NSA (2018-2024)
Adebayo Ogunlesi - Managing partner at Global Infrastructure Partners
Nicole Seligman - Attorney and former EVP of Sony Corporation
Larry Summers - Economist and former Harvard president

All current foundation directors also serve on OpenAI Group’s board, except Dr. Kolter, who serves as a non-voting observer.¹⁹ This dual-board structure has raised concerns about conflicts of interest, with critics arguing that board members may prioritize the for-profit entity’s business interests over the foundation’s public-serving mission.²⁰

CA Attorney General Board Independence Requirement

The October 2025 agreement with California AG Rob Bonta includes a provision requiring board composition to change over time. The actual requirement is even weaker than typically reported:

What the requirement actually says: Within one year (by October 2026), one additional existing Foundation director must transition to serving exclusively on the Foundation board (as a non-voting observer to the Group board), joining Dr. Kolter who already serves in this role.²¹

This does NOT require:

Adding new independent members
Members with philanthropic experience
Members without financial conflicts

It simply requires one existing board member to stop voting on for-profit matters—they remain on the foundation board.

Metric	Current	After Requirement
Board size	8 members (after Summers resignation)	8 members
Voting on for-profit	7 of 8	6 of 8
Foundation-only members	1 (Kolter, non-voting)	2
New independent voices	0	0

Why this changes almost nothing:

No new perspectives are added—existing members just change their voting role
6 of 8 members still vote on both foundation and for-profit matters
The 2 “independent” members (Kolter + 1) are still people originally selected by OpenAI
Nothing requires adding philanthropic expertise

Comparison: The Gates Foundation board has 4 members—all with philanthropic backgrounds. The Ford Foundation board has 16 members with term limits and significant independent representation. Moving one existing director to non-voting status is cosmetic.

Board Member Incentive Analysis

Understanding whether the foundation will deploy its $130 billion requires examining each board member’s background, financial interests, and track record on philanthropy versus capital preservation.

Bret Taylor (Chair) - High Conflict Risk

Factor	Assessment
Primary Role	CEO of Sierra AI (enterprise AI chatbot startup, $4.5B valuation)
Direct Conflict	Sierra is an OpenAI customer and competitor in enterprise AI
Philanthropic Experience	None identified
Financial Incentive	Higher OpenAI valuation legitimizes entire enterprise AI market, boosting Sierra’s value

Taylor became Chair during the November 2023 Altman crisis. While he has promised to “recuse himself whenever there is potential for overlap” with Sierra, this arrangement is more permissive than what forced Reid Hoffman off the board for similar conflicts.²² His entire career has been in commercial technology (Google Maps, Facebook CTO, Salesforce Co-CEO), with no identified foundation board experience or significant philanthropic giving.

Notable January 2026 statement: At Davos, Taylor publicly stated that AI is “probably” a bubble and expects a market correction in coming years. “When everyone knows that AI is going to have a huge impact… money is plentiful. However, that rush won’t last forever.”²³ This is significant: the chair of a foundation whose $130B in assets depends on OpenAI’s valuation is publicly acknowledging that valuation may be inflated.

Spending Inclination: Low. Primary financial interest is in AI ecosystem growth, not charitable deployment.

Sue Desmond-Hellmann - Moderate Philanthropic Experience

Factor	Assessment
Primary Role	Former CEO, Bill & Melinda Gates Foundation (2014-2020)
Philanthropic Track Record	Led foundation spending 10-18% of endowment annually
Management Style	”Occasionally needing to say ‘Not yet’ or ‘Not so fast‘“
Current Conflicts	Advisory board member at GV (Google Ventures)

Desmond-Hellmann is the only board member with substantial foundation leadership experience. Under her tenure, the Gates Foundation spent well above the 5% minimum, though this pace was largely set by Bill and Melinda Gates themselves rather than the CEO. She described her role as balancing ambitious vision with pragmatism. Her GV advisory role creates some tech industry alignment but less direct than other board members.²⁴

Spending Inclination: Moderate. Most likely to push for meaningful disbursement, but within conservative bounds. Health focus aligns with her background.

Larry Summers - RESIGNED November 2025

Factor	Assessment
Status	Resigned November 2025
Prior Role	Economist, former U.S. Treasury Secretary, former Harvard President
Endowment Philosophy	At Harvard, pushed aggressive investment over spending, lost ≈$2B in 2008 crisis
Reason for Departure	Epstein email revelations; said he was “deeply ashamed”

Impact on foundation governance: Summers’ departure removes one of the board members with the strongest capital-preservation bias and most direct conflicts (advisor to a16z, D.E. Shaw). His replacement could shift dynamics—or OpenAI could appoint another finance-oriented director. As of February 2026, no replacement announced.

Adebayo Ogunlesi - Very Low Spending Inclination

Factor	Assessment
Primary Role	Founder/Chairman of Global Infrastructure Partners; Senior Managing Director at BlackRock
Investment Philosophy	Career built on maximizing long-term infrastructure asset value
Personal Philanthropy	Family foundation (≈$22M assets) gave only $1M in 2023 (4.5% payout)
Direct Conflict	BlackRock invested in OpenAI; acquired GIP for $12.5B in January 2024

Ogunlesi’s entire career is in private equity and infrastructure investment—maximizing asset appreciation, not deploying capital for social good. His personal foundation gives at barely above the legal minimum rate. His BlackRock executive role creates direct financial interest in OpenAI’s success.²⁶

Spending Inclination: Very Low. Private equity mindset prioritizes asset growth. Personal philanthropy minimal.

Nicole Seligman - Moderate Nonprofit Experience

Factor	Assessment
Primary Role	Former President, Sony Corporation of America; former EVP/General Counsel
Nonprofit Leadership	Chair of The Doe Fund (NYC homeless services); Co-Chair of Schwarzman Animal Medical Center
Financial Conflicts	No obvious direct stake in OpenAI valuation
Experience Type	Legal/governance expertise; direct-service nonprofit leadership

Seligman has the most relevant hands-on nonprofit experience on the board, though at much smaller scale than $130 billion. Her Doe Fund work demonstrates actual engagement with direct-service charitable organizations. She appears less financially conflicted than most board members.²⁷

Spending Inclination: Moderate. Genuine nonprofit experience, fewer conflicts. May support responsible disbursement.

Paul Nakasone - Irrelevant to Spending

Factor	Assessment
Primary Role	Former NSA Director (2018-2024); former Commander, U.S. Cyber Command
Appointment Rationale	Safety and Security Committee member; national security expertise
Philanthropic Experience	None identified
Spending Relevance	Appointed for AI safety/security, not philanthropic expertise

Nakasone joined the board in June 2024 explicitly for safety and security oversight, not philanthropic guidance. His stated rationale: “I believe that [AI] truly is the capability—the technology—that must continue to be led by the United States.” If anything, his perspective would favor funding security R&D within OpenAI rather than external grants.²⁸

Spending Inclination: Not applicable. Role is AI security, not philanthropy.

Board Summary: Comprehensive Analysis

Member	Current Role	Career Background	Philanthropic Experience	Financial Conflicts	Spending Bias
Bret Taylor (Chair)	CEO, Sierra AI	Google Maps co-creator → Facebook CTO → Salesforce Co-CEO → Twitter Chair	None identified	High: Sierra AI is OpenAI customer/competitor; benefits from AI market growth	Low
Sue Desmond-Hellmann	Board member; GV advisor	Genentech President → UCSF Chancellor → Gates Foundation CEO (2014-2020)	Strong: Led Gates Foundation spending 10-18%/year; managed $50B+ corpus	Low-Medium: GV advisory role	Moderate
Larry Summers	RESIGNED Nov 2025	Treasury Secretary → Harvard President → Epstein scandal	N/A	N/A	N/A
Adebayo Ogunlesi	Sr. Managing Director, BlackRock	Credit Suisse EVP → Founded GIP → BlackRock acquisition ($12.5B)	Minimal: Family foundation gives ≈4.5%/year (barely above minimum)	High: BlackRock invested in OpenAI; career in asset appreciation	Very Low
Nicole Seligman	Nonprofit board chair	Williams & Connolly partner → Sony Corp. EVP/General Counsel → Sony America President	Moderate: Chair of Doe Fund (homeless services); AMC Co-Chair	Low: No obvious OpenAI financial stake	Moderate
Paul Nakasone	National security advisor	NSA Director (2018-2024) → U.S. Cyber Command Commander	None identified	Low: Appointed for security oversight, not investment	N/A
Adam D’Angelo	CEO, Quora	Facebook CTO → Quora co-founder/CEO	Unknown	Medium: Tech entrepreneur; benefits from AI ecosystem growth	Unknown
Sam Altman	CEO, OpenAI	Y Combinator President → OpenAI CEO	None identified	Very High: Direct beneficiary of OpenAI commercial success; $10B+ net worth tied to OpenAI	Low
Zico Kolter	CMU Professor (non-voting)	AI/ML researcher; Safety Committee chair	Academic	Low: No commercial stake	Unknown

Board Composition Analysis (as of February 2026):

Current members: 8 (after Summers resignation; no replacement announced)
Members with meaningful philanthropic experience: 2 of 8 (Desmond-Hellmann, Seligman)
Members with high financial conflicts: 3 of 8 (Taylor, Ogunlesi, Altman)
Members likely to support aggressive spending: 0-2 of 8
Members likely to prioritize stock preservation: 4-5 of 8

Overall Assessment: The board is heavily weighted toward individuals with financial interests in OpenAI’s stock appreciation and careers in asset growth rather than philanthropic deployment. Only Desmond-Hellmann and Seligman have meaningful nonprofit experience, and neither has experience at this scale. The structural composition suggests low probability of aggressive charitable spending.

Safety and Security Oversight

The foundation established a Safety and Security Committee (SSC) chaired by Dr. Kolter. However, critics note that this committee consists of only four part-time volunteers with no dedicated staff, tasked with overseeing the development of potentially transformative AGI systems amid intense commercial pressures.²⁹

Philanthropic Activities

People-First AI Fund

In 2025, the OpenAI Foundation launched its first major philanthropic initiative: the People-First AI Fund with an initial $50 million commitment. The fund issued an open call for applications from September 8 through October 8, 2025, receiving nearly 3,000 applications from U.S.-based 501(c)(3) nonprofits with annual operating budgets between $500,000 and $10 million.³⁰³¹

By December 2025, the foundation announced it would distribute:

$40.5 million in unrestricted grants to 208 nonprofits across the United States
$9.5 million in board-directed grants for organizations advancing transformative AI work in health and other areas³²

The $40.5 million initial disbursement represents a 440% increase over the foundation’s previous year’s grantmaking of $7.5 million (when it was still operating as the original nonprofit OpenAI, Inc.).³³

Grant recipients span diverse sectors including AI literacy programs, rural healthcare initiatives, journalism organizations, youth development, veteran support, faith-based community groups, and Native-led media and STEM programs. Examples include:³⁴

Camai Community Health Center (Alaska) - AI applications in primary care for remote communities
Tribal Education Departments National Assembly - AI literacy programs emphasizing tribal sovereignty
FabNewport and Social Enterprise Greenhouse (Rhode Island) - Community innovation
Martin Luther King Jr. Center for Nonviolent Social Change (Georgia) - Civic engagement

Long-Term Philanthropic Commitment

The foundation announced it will “initially focus on a $25 billion commitment” across two primary areas:³⁵

Health and Curing Diseases - Accelerating breakthroughs in diagnostics, treatments, and cures; funding scientists; creating open-source datasets
Technical Solutions to AI Resilience - Maximizing AI benefits and minimizing risks through cybersecurity-like protections for AI systems

However, the foundation has not provided a timeline for when it will disburse this $25 billion or whether it will structure itself as a private foundation subject to IRS rules requiring 5% annual distribution of assets. As of fiscal year 2023 (before the restructuring), the entity disbursed only $2.6 million in grants.³⁶

If the OpenAI Foundation were required to follow the 5% rule on its $130 billion corpus, it would need to disburse approximately $6.5 billion annually—placing it in the same tier as the Gates Foundation, which averaged $7 billion per year from 2019-2023.³⁷

AI and Mental Health Research Grants

In addition to the People-First AI Fund, OpenAI’s safety systems organization launched an AI and Mental Health Grant Program in 2025, awarding up to $2 million in grants for interdisciplinary research on AI-mental health intersections. The program focuses on risks, benefits, cultural and language variations in distress expressions, lived experiences, and healthcare provider usage. Applications were accepted through December 19, 2025, with notifications by January 15, 2026.³⁸

Comparison with Anthropic’s Long-Term Benefit Trust

The OpenAI Foundation’s structure invites comparison with Anthropic’s Long-Term Benefit Trust, both of which aim to preserve mission alignment as for-profit AI companies scale. However, the mechanisms differ significantly:

Aspect	OpenAI Foundation	Anthropic Long-Term Benefit Trust
Control Mechanism	Direct equity ownership (26%) + special voting rights	Pledge-based governance without equity ownership
Board Appointment	Foundation appoints all OpenAI Group directors	Trust holds majority of board seats via shareholder pledge
Financial Interest	$130B equity stake creates financial incentive	No financial stake; pure governance role
Legal Basis	Corporate governance rights in PBC structure	Contractual shareholder agreement
Permanence	Equity ownership is legally binding	Dependent on continued shareholder commitment to pledge
Conflicts of Interest	Board members serve on both nonprofit and for-profit boards	Separate governance structures

Anthropic’s structure, established in 2023, relies on a shareholder pledge where investors agree to vote their shares according to the Trust’s recommendations. The Trust is designed to hold a majority of board seats and maintain control over decisions related to AI safety and the company’s public benefit mission. This approach avoids the potential conflicts of interest created by financial ownership but depends on the continued voluntary participation of shareholders.

OpenAI’s approach, by contrast, gives the foundation direct financial returns from the for-profit entity’s success, which critics argue creates incentives to prioritize growth and profitability over safety and public benefit.³⁹ However, the foundation’s special voting rights provide legally enforceable control that does not depend on voluntary commitments.

Criticisms and Controversies

The OpenAI Foundation has faced substantial criticism from AI safety advocates, nonprofit watchdogs, and legal experts who question whether the restructuring genuinely preserves the original nonprofit mission or represents an abandonment of public commitments.

Mission Abandonment and Asset Misuse

Critics argue the restructuring fundamentally betrays OpenAI’s core purpose. As one former employee noted, “the entire philanthropic theory of change here was: we’re going to put guardrails on profit motives so we can develop this tech safely.”⁴⁰ The shift to a for-profit-controlled structure, they argue, removes these guardrails.

Public Citizen, a consumer advocacy organization, released a strongly worded statement arguing that “the OpenAI Foundation will function as a corporate foundation, doing some good work but for the underlying purpose of advancing the interests of OpenAI For-Profit. The problem is, that’s not how OpenAI Nonprofit was formed or what it is required to do—the for-profit was (dubiously) created to advance the mission of the nonprofit, not the reverse.”⁴¹

Tyler Johnston, executive director of AI watchdog The Midas Project, characterized the foundation’s 26% stake as representing “humanity surrendering tens of hundreds of billions of dollars it was already entitled to,” noting that the public will have far lower stake and control compared to the original structure where investors’ returns were capped.⁴²

Legal scholar Luís Calderón Gómez from Cardozo School of Law explained that OpenAI could not simply abandon its nonprofit status because doing so would have required the for-profit entity to purchase the nonprofit’s assets “for fair market value, something that it was unlikely to be able to do” given OpenAI’s $500 billion valuation. The restructuring, he suggested, was a creative workaround to this legal constraint.⁴³

Conflicts of Interest and Governance Concerns

The dual-board structure, where eight of nine foundation board members also serve on OpenAI Group’s board, has raised significant concerns about conflicts of interest. Fred Blackwell, CEO of the San Francisco Foundation, questioned whether board members would genuinely prioritize the foundation’s public-serving mission over the for-profit entity’s commercial interests: “Will the foundation be subject to the 5% rule, and will it spend beyond that requirement?”⁴⁴

Judith Bell, Chief Impact Officer at the San Francisco Foundation, emphasized that proper oversight requires “independent valuation and governance of nonprofit assets” and urged the foundation to “anchor AI development in human values” rather than market imperatives.⁴⁵

The foundation’s initial philanthropic focus areas—health and AI resilience—have been criticized as potentially serving OpenAI’s business interests. As Inside Philanthropy noted, OpenAI has a “financial interest in selling its technology to medical research entities,” raising questions about whether health-focused grants constitute genuine public benefit or research and development for the commercial entity.⁴⁶

Similarly, the AI resilience program faces challenges managing conflicts of interest, as noted by Legal Advocates for Safe Science and Technology: OpenAI might be “biased against valuable technical AI safety work that could identify risks in OpenAI’s models."⁴⁷

"PR Stunts” and Regulatory Capture

The foundation’s philanthropic initiatives have been dismissed by some critics as “calculated PR stunts” designed to placate regulators and the nonprofit sector. The $50 million People-First AI Fund, while substantial, has been characterized as “obvious pandering” to California regulators, particularly given the timing of its announcement during the restructuring approval process.⁴⁸

Nick Moës, Executive Director of The Future Society, called October 28, 2025, a “dark day for philanthropy,” arguing that “the public will actually benefit less from OpenAI’s immense profits” under the new structure compared to the original nonprofit model.⁴⁹

Safety Concerns and Rushed Development

Beyond structural concerns, critics have accused OpenAI of prioritizing market speed over safety. The organization disbanded its Superalignment and AGI Readiness teams—critical to its founding commitment to safe AI development—and “dramatically reduced safety testing times,” releasing powerful models like DeepResearch and GPT-4.1 without promised safety reports.⁵⁰

These concerns gained public attention following incidents such as a teenager’s death allegedly involving ChatGPT functioning as a “suicide coach,” prompting calls for child safety regulations.⁵¹ The Safety and Security Committee’s structure—four part-time volunteers with no staff overseeing the development of potentially transformative AGI systems—has been criticized as grossly inadequate.⁵²

Legal Challenges

The restructuring faces ongoing legal challenges, most notably from Elon Musk, who filed a lawsuit arguing that his $44 million investment was contingent on OpenAI remaining a nonprofit organization in perpetuity. Musk’s lawsuit alleges that the restructuring violates founding agreements and represents a breach of the terms under which he and others provided initial funding.⁵³ A trial is scheduled for fall 2025.

The EyesOnOpenAI coalition, led by the San Francisco Foundation, has continued to raise concerns about asset valuation and independence even after the California and Delaware Attorneys General approved the restructuring with conditions. In January 2025, the coalition sent an open letter to California AG Rob Bonta calling for action to protect OpenAI’s charitable assets and ensure proper safeguards.⁵⁴

Spending Projections: Scenario Analysis

Projecting the OpenAI Foundation’s actual charitable deployment requires analyzing structural constraints, incentive dynamics, and historical precedents. The $130 billion stake exists only on paper—translating it into charitable impact faces multiple barriers.

Liquidity Constraints

The foundation’s wealth cannot be deployed until shares become liquid:

Milestone	Projected Timeline	Implication
OpenAI IPO Filing	H2 2026 (target)	Enables public market for shares
IPO Lockup Period	6-12 months post-IPO	Foundation cannot sell during lockup
OpenAI Profitability	2030 (projected)	Until profitable, valuation is speculative
Peak Cash Burn	2028 ($47B projected)	Company may need capital infusions, not distributions

OpenAI projects $9 billion in operating losses for 2025, rising to $14 billion in 2026. Cash burn is expected to peak at $47 billion in 2028 before reaching positive free cash flow around 2030.⁵⁵ The company has committed $1.4 trillion in infrastructure spending over 8 years and faces a $207 billion funding shortfall according to HSBC analysis.⁵⁶

Bottom line: The foundation cannot meaningfully liquidate its stake until at least 2027-2028, and doing so before OpenAI achieves profitability (2030) would signal lack of confidence in the company’s prospects.

Projected Spending Scenarios

Scenario	Annual Spending	% of $130B	Cumulative 10-Year	Assessment
Status Quo	$50-100 million	0.04-0.08%	$500M-1B	Current trajectory
Corporate Foundation	$200-500 million	0.15-0.38%	$2-5B	Typical corporate foundation rate
5% Minimum Compliance	$6.5 billion	5%	$65B	If classified as private foundation
Gates-Level	$9 billion	6.9%	$90B	Matching Gates Foundation 2025 record
Aggressive Spend-Down	$13 billion	10%	$130B	Atlantic Philanthropies model

Current trajectory ($50 million in 2025) represents approximately 0.04% of stated assets—orders of magnitude below both the 5% legal minimum for private foundations and the $25 billion pledge spread over any reasonable timeframe.

Historical Precedents: Foundations with Concentrated Stock

Ford Foundation (1936-1974)

The most relevant historical parallel. Ford Foundation held 88% of Ford Motor Company stock until 1956.

Aspect	Ford Foundation	OpenAI Foundation
Initial Ownership	88% of company	26% of company
Divestiture Timeline	19 years (1955-1974)	Unknown
Catalyst	Recognized “too exposed to cyclical auto business”	No stated diversification plan
Outcome	Became independent, broadly diversified endowment	TBD

The Ford Foundation’s divestiture enabled both the foundation’s independence and Ford Motor’s 1956 IPO. The process took nearly two decades. The OpenAI Foundation has announced no comparable diversification strategy.⁵⁷

Chan Zuckerberg Initiative (2015-Present)

Zuckerberg deliberately chose an LLC structure rather than a foundation to avoid:

The 5% mandatory payout rule
Excess business holdings restrictions
Public disclosure requirements
Loss of voting control over Facebook shares

This structure allows indefinite wealth accumulation with “philanthropic” framing but no legal obligation to deploy capital. OpenAI’s foundation structure is nominally more restrictive, but the classification question (public charity vs. private foundation) remains unresolved.⁵⁸

Giving Pledge Track Record

The Giving Pledge provides sobering data on philanthropic commitments by tech billionaires. Original pledgers (2010) became 166% wealthier (inflation-adjusted) by 2024 while their philanthropic activity remained modest relative to wealth growth. The pledge creates positive PR without binding legal commitment.⁵⁹

The “Marketing Foundation” Risk

A central concern is whether the foundation will function primarily as brand management rather than genuine philanthropy. Corporate foundations typically:

Fund safe, non-controversial causes that generate positive press
Avoid work critical of the parent company or its industry
Time grants for strategic PR value (e.g., during regulatory scrutiny)
Serve strategic business objectives (policy relationships, academic partnerships)

Evidence of this pattern:

Grant timing: The $50 million People-First AI Fund was announced September 2025—during the restructuring approval process with California AG
Grant profile: Recipients are broadly popular causes (rural healthcare, veterans, faith groups, STEM education) rather than technical AI safety research that might identify risks in OpenAI’s models
Focus area vagueness: “AI resilience” can encompass work promoting AI adoption (serving OpenAI’s commercial interests) as easily as work identifying AI risks
Health grants: OpenAI has direct commercial interest in selling AI tools to medical research entities, raising questions about whether health grants constitute R&D subsidy or genuine philanthropy⁶⁰

Inside Philanthropy noted: “Managing conflicts of interest will be particularly challenging for the nonprofit’s AI resilience program. The organization might be biased against valuable technical AI safety work that could identify risks in OpenAI’s models.”⁶¹

IRS Classification: The Critical Unknown

The foundation’s legal classification determines whether it faces mandatory spending requirements:

Classification	5% Payout Required?	Excess Holdings Limit	Public Disclosure
Public Charity (501(c)(3))	No	No	Annual Form 990
Private Foundation	Yes	20-35% of company	Form 990-PF + grants

The original OpenAI nonprofit filed Form 990 (public charity form), not Form 990-PF (private foundation form).⁶² If the new foundation maintains public charity status—which requires receiving broad public support or operating programs—it has no legal obligation to disburse any funds.

San Francisco Foundation CEO Fred Blackwell directly asked: “Will the foundation be subject to the 5% rule, and will it spend beyond that requirement?”⁶³ This question remains unanswered.

Spending Projection: Base Case

Given structural constraints, board composition, and historical precedents, the most likely spending trajectory:

Period	Annual Spending	Rationale
2025-2027	$50-150 million	Pre-IPO; shares illiquid; “proof of concept” grants
2028-2030	$200-500 million	Post-IPO but pre-profitability; cautious selling
2031-2035	$500M-2 billion	If profitable, modest diversification begins
2036+	Unknown	Depends on IPO success, leadership changes, pressure

10-year cumulative projection (base case): $3-8 billion deployed, representing 2-6% of initial $130B stake—far below the announced $25 billion commitment and orders of magnitude below what the 5% rule would require.

Upside scenario (private foundation classification + public pressure): $40-60 billion over 10 years.

Downside scenario (AI bubble deflation, no 5% rule): $1-3 billion over 10 years, primarily in brand-aligned grants.

Will the Foundation Deliver? A Critical Analysis

The OpenAI Foundation represents an unprecedented experiment in AI governance: a $130 billion nonprofit entity controlling one of the world’s most valuable technology companies. Whether this structure produces genuine philanthropic impact or serves primarily as reputation management depends on several structural factors.

Arguments for Potential Success

Scale of Resources: At $130 billion, the foundation’s equity stake exceeds the Gates Foundation’s $86 billion endowment, potentially making it the world’s wealthiest charity.⁶⁴ If structured as a private foundation subject to the 5% distribution rule, it would need to disburse approximately $6.5 billion annually—transformative scale for any cause area.

Governance Authority: Unlike most corporate foundations, the OpenAI Foundation holds genuine control through its power to appoint and remove all OpenAI Group board members at any time. This represents more than advisory influence—it is legal authority to redirect the company’s strategy.

Long-Term Warrant: The foundation secured a warrant for additional shares if OpenAI’s valuation exceeds $5 trillion after 15 years, aligning its interests with long-term company success rather than short-term extraction.⁶⁵

Public Accountability: The restructuring required approval from both California and Delaware Attorneys General, who imposed 20 safety and security requirements. Ongoing regulatory scrutiny may constrain the foundation’s ability to simply serve OpenAI’s commercial interests.⁶⁶

Early Grantmaking: The 440% increase in grantmaking (from $7.5 million to $40.5 million in 2025) and the breadth of People-First AI Fund recipients suggest some genuine philanthropic intent beyond pure PR.⁶⁷

Arguments Against Success

No Disbursement Timeline: The foundation announced a “$25 billion commitment” but provided no timeline for deployment. The vague language—“will initially focus on”—creates no binding obligation. As of fiscal year 2023, the entity disbursed only $2.6 million in grants.⁶⁸

Corporate Foundation Dynamics: San Francisco Foundation CEO Fred Blackwell articulated the core concern: “Will it have the independence to be bold, take risks, and challenge the industry—or will it look and operate more like a corporate foundation that makes safe grants that merely advance the OpenAI brand?”⁶⁹ Corporate foundations typically serve their parent companies’ interests rather than pursuing independent charitable missions.

Structural Conflicts of Interest: Eight of nine foundation board members also serve on OpenAI Group’s board. This dual-board structure means the same individuals who benefit from OpenAI’s commercial success are responsible for ensuring the foundation serves public interests. As one critic noted, “A profit incentive is a conflict of interest.”⁷⁰

Biased Against Critical Safety Work: The Midas Project’s executive director warned the foundation might be “biased against valuable technical AI safety work that could identify risks in OpenAI’s models.”⁷¹ A foundation funded by OpenAI equity has structural incentives to avoid research that could harm the company’s reputation or products.

Equity Stake Valuation Dependency: The foundation’s $130 billion valuation exists only on paper—it depends entirely on OpenAI maintaining or increasing its market value. This creates perverse incentives:

Reluctance to sell: Selling significant equity would signal lack of confidence and potentially depress the stock price, reducing the foundation’s remaining holdings’ value
Pro-growth bias: The foundation benefits financially from OpenAI’s commercial success, creating pressure to prioritize growth over safety constraints that might slow development
Valuation fragility: OpenAI is currently valued at $500 billion despite projections it won’t turn a profit until 2030 and faces a $207 billion funding shortfall by then.⁷² If the AI bubble deflates, the foundation’s “wealth” could evaporate before being deployed

IRS Classification Uncertainty: If classified as a private foundation, IRS excess business holdings rules (Section 4943) would limit the foundation to owning 20% of a business enterprise (or 35% with certain conditions).⁷³ The foundation currently holds 26%. While a 5-year grace period exists for gifts and bequests, eventual compliance would require selling shares—potentially at unfavorable prices if done under regulatory pressure.

“Dark Day for Philanthropy”: The Future Society’s Nick Moës characterized the restructuring as “a dark day for philanthropy,” arguing “the public will actually benefit less from OpenAI’s immense profits” under the new structure compared to the original nonprofit model where all surplus would have gone to charitable purposes.⁷⁴

A fundamental tension exists in the foundation’s structure: its wealth is tied to assets it has strong incentives never to sell.

Selling Depresses Value: Large institutional shareholders selling significant stakes typically signal bearish sentiment to markets. If the foundation began liquidating its 26% stake to fund charitable work, the sale itself would likely reduce OpenAI’s valuation—and thus the value of remaining foundation holdings.

Holding Preserves Paper Wealth: By holding shares indefinitely, the foundation can claim $130+ billion in “assets” without ever deploying capital to charitable purposes. This allows it to claim the prestige of being one of the world’s largest philanthropies while functioning primarily as a governance mechanism for OpenAI.

IPO Complications: If OpenAI pursues an IPO (potentially in 2027-2028), the foundation would face insider trading restrictions, lockup periods, and disclosure requirements that could further complicate share sales. Large sales by a controlling nonprofit shareholder could spook public markets.

Comparison to Giving Pledge Dynamics: The Giving Pledge demonstrated that wealthy individuals often grow their fortunes faster than they give them away—original pledgers became 166% wealthier (inflation-adjusted) since 2010.⁷⁵ A similar dynamic may apply here: the foundation’s paper wealth may compound while actual charitable disbursements remain minimal relative to assets.

The Corporate Foundation Playbook

Historical precedent suggests caution. Corporate foundations typically:

Fund safe, brand-aligned causes that generate positive PR without challenging the parent company’s interests
Avoid controversial or critical work that might create regulatory, legal, or reputational complications
Maintain modest disbursement rates while accumulating endowment assets
Serve strategic business objectives such as cultivating relationships with policymakers, academics, and potential partners

The foundation’s announced focus areas—health and “AI resilience”—fit this pattern. Health is universally appealing and generates positive coverage. “AI resilience” is sufficiently vague to encompass work that promotes AI adoption (serving OpenAI’s commercial interests) rather than work that identifies risks in OpenAI’s specific systems.

Indicators to Watch

Several observable factors will indicate whether the foundation becomes a genuine philanthropic force or primarily serves OpenAI’s interests:

Indicator	Positive Signal	Negative Signal
Disbursement rate	≥5% of assets annually	<1% or declining relative to asset growth
Grant independence	Funding critical AI safety research, including work on OpenAI risks	Only funding “AI adoption” or brand-aligned causes
Board independence	Adding independent directors not affiliated with OpenAI	Maintaining complete board overlap with for-profit
Equity diversification	Selling shares to fund operations, diversifying into other assets	Holding concentrated OpenAI position indefinitely
Transparency	Publishing detailed grant databases, safety assessments, governance decisions	Minimal disclosure, vague annual reports
Willingness to constrain	Foundation blocking product releases or redirecting resources for safety	Foundation rubber-stamping all commercial decisions

Implications for AI Safety and Funding

The OpenAI Foundation’s emergence as a potentially $130+ billion philanthropic entity has significant implications for AI safety funding and governance.

Scale of Resources

If the foundation operates as a traditional private foundation distributing 5% annually, it would represent by far the largest source of dedicated AI-related philanthropic funding, dwarfing current major funders like Open Philanthropy, the Survival and Flourishing Fund, and the Future of Life Institute. Even the announced $25 billion commitment, if deployed over a decade, would represent $2.5 billion annually—an unprecedented scale for AI safety and related work.

However, the foundation’s focus areas—health and AI resilience—may not directly translate to support for independent AI safety research, especially work that might identify risks in OpenAI’s own systems. The potential for conflicts of interest raises questions about whether the foundation will fund critical, independent safety research or primarily support work that advances OpenAI’s commercial objectives.

Comparison with Other AI Safety Funding

Other major AI companies have taken different approaches to safety funding and governance:

Anthropic established its Long-Term Benefit Trust with governance control but no financial stake, avoiding direct conflicts of interest
DeepMind (now Google DeepMind) operates within Google’s corporate structure with safety teams but no independent oversight entity
Various companies contribute to external AI safety organizations but retain full corporate control over their own development

The OpenAI Foundation represents a middle path: substantial financial resources coupled with governance control, but embedded within a structure where the same individuals oversee both the nonprofit mission and for-profit operations.

Precedent for Future AI Governance

The OpenAI Foundation’s structure may set a precedent for how other AI companies balance mission preservation with capital requirements. If successful in maintaining genuine mission alignment while enabling necessary investment, it could provide a model for other organizations developing transformative AI systems. If, however, the foundation proves to prioritize commercial interests over public benefit, it may serve as a cautionary tale about the limits of nonprofit oversight in for-profit AI development.

The ultimate test will be whether the foundation demonstrates willingness to constrain OpenAI’s commercial activities when they conflict with safety or public benefit considerations—for example, by blocking product releases deemed insufficiently safe or redirecting resources toward safety research that might slow commercialization.

Key Uncertainties

Several fundamental questions about the OpenAI Foundation remain unresolved:

Distribution Requirements: Will the foundation be structured as a private foundation subject to the 5% annual distribution rule, or will it adopt a different structure with more flexible requirements?
Timeline for Grantmaking: When will the foundation begin deploying the announced $25 billion commitment, and at what pace?
Independence of Grantmaking: Will the foundation support independent AI safety research that might identify risks in OpenAI’s models, or will it primarily fund work aligned with OpenAI’s commercial objectives?
Governance in Practice: Will the foundation’s board exercise its authority to constrain OpenAI Group’s activities when they conflict with safety or public benefit considerations, or will the dual-board structure lead to prioritization of commercial interests?
Long-Term Control: As OpenAI Group pursues a potential IPO and future funding rounds, will the foundation maintain effective control, or will dilution and investor pressure erode its governance authority?
Legal Resolution: How will the Elon Musk lawsuit and potential other legal challenges be resolved, and might they force changes to the foundation’s structure or operations?
Comparison with Alternatives: Will the OpenAI Foundation’s equity-based control model prove more or less effective at preserving mission alignment than Anthropic’s pledge-based trust structure or other governance approaches?

These uncertainties reflect the unprecedented nature of the foundation’s structure and the inherent tensions in attempting to maintain nonprofit mission alignment while operating as one of the world’s most valuable technology companies.

Pressuring the Foundation: Strategies and Cost-Effectiveness

Given the structural incentives for the foundation to sit on its $130 billion rather than deploy it, external pressure may be necessary to ensure meaningful philanthropic impact. This section analyzes available pressure mechanisms, their costs, likelihood of success, and potential impact.

Overview of Pressure Mechanisms

Mechanism	Cost Range	Success Likelihood	Timeline	Cost per $1B Deployed
California AG engagement	$50K-$2M	60-70%	6mo-3yr	$0.1-2M
Elon Musk lawsuit (ongoing)	N/A (already funded)	40-50%	Trial Mar 2026	N/A
EyesOnOpenAI coalition	$100K-$500K/yr	40-55%	1-3yr	$0.2-1M
Investigative journalism	$50K-$500K	50-65%	1-6mo	$0.5-5M
IRS whistleblower program	Free-$50K	25-40%	1-5yr	<$0.1M
Academic research	$50K-$200K	25-55%	1-3yr	Indirect
Post-IPO ESG activism	$500K-$5M	35-50%	2027+	$1-10M

High-Priority: California Attorney General

How it works: The California AG’s Charitable Trusts Section has oversight authority over all charitable corporations operating in California. Under the Nonprofit Integrity Act of 2004, the AG can:

Audit organizations and review annual filings
Investigate fraud, asset diversion, or self-dealing
Require court approval for significant asset transfers
Bring enforcement actions to protect charitable assets

Current status: AG Rob Bonta approved the restructuring in October 2025 with 20 requirements. The EyesOnOpenAI coalition continues advocating for stronger enforcement.

Historical precedent:

Trump Foundation (NY): AG secured $2 million in damages and restrictions
Pelletier Foundation (CA): AG recovered $600,000 in misappropriated assets
Noble Foundation (WA): $1.4 million judgment against directors

Cost-effectiveness estimate: If $500K in advocacy spending increases foundation disbursement by 1 percentage point ($1.3B), the cost per dollar deployed is approximately $0.0004 — among the most cost-effective philanthropic interventions possible.⁷⁶

Recommended actions:

Support the San Francisco Foundation’s coalition efforts ($50K-$100K contribution)
Fund legal analysis of IRS classification question ($25K-$75K)
Commission independent valuation analysis ($50K-$150K)

High-Priority: Monitor and Support Musk Lawsuit

How it works: Elon Musk’s lawsuit (filed August 2024) alleges OpenAI violated its nonprofit founding agreement. The lawsuit seeks:

Declaration that OpenAI breached fiduciary duties
Disgorgement of profits to the nonprofit
Injunction against for-profit conversion

Status: Trial scheduled for March 2026. In February 2025, a Musk-led consortium offered $97.4 billion to acquire the nonprofit.⁷⁷

Why this matters: A favorable ruling could establish precedent that:

Original donor intent constrains restructuring
Nonprofits cannot simply convert to for-profit entities
Charitable assets must be protected in corporate transitions

Recommended actions:

Consider filing amicus brief supporting nonprofit mission preservation ($25K-$75K)
Fund research documenting original nonprofit commitments ($10K-$30K)
Publicize trial proceedings and implications ($20K-$50K)

Medium-Priority: Investigative Journalism

How it works: Organizations like ProPublica, CalMatters, and Inside Philanthropy can sustain public attention on foundation governance.

Why effective:

ProPublica’s 2024 reporting won Pulitzer Prize for exposing Supreme Court justice gifts
Media coverage creates pressure on board members and regulators
Investigative pieces provide evidence for legal and regulatory action

Cost-effectiveness: Funding a $100K investigative series that generates sustained media coverage could shift foundation behavior by exposing governance failures—potentially one of the highest-leverage interventions.

Recommended actions:

Provide documentation to investigative journalists (staff time)
Fund dedicated AI philanthropy reporting ($50K-$150K grant to journalism nonprofit)
Create searchable database of foundation governance issues ($25K-$50K)

Medium-Priority: IRS Whistleblower Program

How it works: The IRS Whistleblower Office awards 15-30% of collected proceeds to individuals who report tax violations. Protections under the Taxpayer First Act of 2019 include:

Anti-retaliation provisions
Confidentiality protections
Right to reinstatement and compensatory damages

Potential violations to investigate:

Private benefit/inurement if foundation primarily serves OpenAI commercial interests
Excess business holdings if classified as private foundation (26% exceeds 20% limit)
Self-dealing if board members benefit from foundation decisions

Cost: Filing a whistleblower complaint is free. Legal representation typically works on contingency (25-40% of award).

Timeline: IRS investigations typically take 2-5+ years, but the investigation itself creates pressure.

Medium-Priority: Coalition Building

How it works: The EyesOnOpenAI coalition, co-chaired by San Francisco Foundation CEO Fred Blackwell and LatinoProsperity, includes 50+ organizations advocating for foundation accountability.

Effectiveness:

Already achieved AG investigation and restructuring conditions
Represents significant philanthropic sector voice
Can mobilize media attention and public pressure

Recommended actions:

Join or support the coalition ($10K-$50K membership/contribution)
Recruit additional foundation members
Fund coalition coordination and legal support ($100K-$250K)

Lower-Priority: Post-IPO ESG Activism

How it works: Once OpenAI becomes publicly traded (projected 2026-2027), shareholder activism tools become available:

Shareholder proposals on governance issues
Proxy advisory firm (ISS, Glass Lewis) engagement
Institutional investor (BlackRock, State Street) pressure

Current limitation: OpenAI is not yet publicly traded, so direct shareholder activism is not available. However, Microsoft (27% stake) is publicly traded and could be targeted indirectly.

Cost: Shareholder proposals cost $5K-$25K; full proxy campaigns cost $500K-$5M.

Timeline: Likely not available until 2027-2028.

Cost-Effectiveness Summary

Assuming the goal is increasing foundation spending toward the $6.5B/year that would be required under private foundation rules:

Intervention	Estimated Cost	Probability of Success	Expected $ Deployed	Cost per $ Deployed
CA AG advocacy	$500K	65%	$2-5B over 10yr	$0.0001-0.00025
Journalism funding	$150K	55%	$500M-2B	$0.00008-0.0003
Coalition support	$250K	50%	$1-3B	$0.00008-0.00025
Legal research	$100K	40%	$500M-1B	$0.0001-0.0002
IRS whistleblower	$50K	30%	$200M-500M	$0.0001-0.00025

These cost-effectiveness estimates suggest that advocacy for OpenAI Foundation accountability may be among the most leveraged philanthropic opportunities available. Even modest investments in legal advocacy, journalism, and coalition building could potentially unlock billions in charitable spending that would otherwise remain as paper wealth.

Recommended Multi-Track Strategy

A comprehensive $1-2 million campaign over 2-3 years could include:

Legal Track ($300K-$500K)
- Commission IRS classification analysis
- Support Musk lawsuit as amicus
- Fund enforcement petition to CA AG
Media Track ($200K-$400K)
- Support investigative journalism
- Create public-facing accountability dashboard
- Document governance failures
Coalition Track ($200K-$400K)
- Support EyesOnOpenAI coalition
- Recruit additional foundation members
- Coordinate with Council on Foundations and Independent Sector
Research Track ($100K-$200K)
- Commission academic research on foundation governance
- Document historical precedents
- Analyze spending patterns

Total estimated cost: $800K-$1.5M over 2-3 years

Potential impact: If this campaign increases foundation spending from the projected 2-6% to even 10-15% of assets, the additional $10-15 billion deployed would represent a cost-effectiveness ratio of approximately $0.0001 per dollar deployed—among the most cost-effective interventions in philanthropy.

OpenAI Foundation

Quick Assessment

Key Links

Foundation At A Glance: Master Summary

Spending Projection Summary

Key Risk Factors

Pressure Mechanisms: Cost-Effectiveness

Overview

History and Restructuring

Original Nonprofit Formation (2015-2019)

Capped-Profit Subsidiary (2019-2025)

Public Benefit Corporation Restructuring (2025)

Governance Structure

Class N Shares vs. Equity: Understanding the Governance Mechanics

Board Composition

CA Attorney General Board Independence Requirement

Board Member Incentive Analysis

Bret Taylor (Chair) - High Conflict Risk

Sue Desmond-Hellmann - Moderate Philanthropic Experience

Larry Summers - RESIGNED November 2025

Adebayo Ogunlesi - Very Low Spending Inclination

Nicole Seligman - Moderate Nonprofit Experience

Paul Nakasone - Irrelevant to Spending

Board Summary: Comprehensive Analysis

Safety and Security Oversight

Philanthropic Activities

People-First AI Fund

Long-Term Philanthropic Commitment

AI and Mental Health Research Grants

Comparison with Anthropic’s Long-Term Benefit Trust

Criticisms and Controversies

Mission Abandonment and Asset Misuse

Conflicts of Interest and Governance Concerns

"PR Stunts” and Regulatory Capture

Safety Concerns and Rushed Development

Legal Challenges

Spending Projections: Scenario Analysis

Liquidity Constraints

Projected Spending Scenarios

Historical Precedents: Foundations with Concentrated Stock

Ford Foundation (1936-1974)

Chan Zuckerberg Initiative (2015-Present)

Giving Pledge Track Record

The “Marketing Foundation” Risk

IRS Classification: The Critical Unknown

Spending Projection: Base Case

Will the Foundation Deliver? A Critical Analysis

Arguments for Potential Success

Arguments Against Success

The Share-Selling Incentive Problem

The Corporate Foundation Playbook

Indicators to Watch

Implications for AI Safety and Funding

Scale of Resources

Comparison with Other AI Safety Funding

Precedent for Future AI Governance

Key Uncertainties

Pressuring the Foundation: Strategies and Cost-Effectiveness

Overview of Pressure Mechanisms

High-Priority: California Attorney General

High-Priority: Monitor and Support Musk Lawsuit

Medium-Priority: Investigative Journalism

Medium-Priority: IRS Whistleblower Program

Medium-Priority: Coalition Building

Lower-Priority: Post-IPO ESG Activism

Cost-Effectiveness Summary

Recommended Multi-Track Strategy

See Also

Sources

Footnotes