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Coalition Requests Attorney General Action to Protect OpenAI's Charitable Assets
webA coalition of California nonprofits requests the state Attorney General investigate OpenAI's planned conversion from nonprofit to for-profit, raising governance concerns about the disposition of ~$157B in charitable assets originally dedicated to public benefit AI development.
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Summary
The San Francisco Foundation and allied nonprofits formally petitioned California Attorney General Rob Bonta to investigate OpenAI's restructuring into a for-profit entity. The coalition argues that OpenAI's ~$157 billion in charitable assets must remain dedicated to public benefit, citing precedent from 1990s California healthcare nonprofit conversions. They demand appropriate valuation and reservation of charitable assets before any conversion proceeds.
Key Points
- •Coalition requests CA Attorney General investigate OpenAI's nonprofit-to-for-profit conversion to protect ~$157B in charitable assets.
- •Argues conversion without safeguards would result in significant private gain at public expense, violating charitable trust laws.
- •Cites 1990s California healthcare precedents (Blue Cross/WellPoint, Health Net) where conversions required establishing independent public-benefit foundations.
- •Warns that allowing OpenAI to proceed unchecked sets a harmful precedent undermining nonprofit integrity broadly.
- •Emphasizes particular concern for communities vulnerable to AI-related systemic inequities and harms.
Cited by 1 page
| Page | Type | Quality |
|---|---|---|
| OpenAI Foundation | Organization | 87.0 |
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Coalition Requests Attorney General Action to Protect OpenAI’s Charitable Assets
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Coalition Requests Attorney General Action to Protect OpenAI’s Charitable Assets
Coalition Requests Attorney General Action to Protect OpenAI’s Charitable Assets
January 29, 2025
San Francisco Foundation
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SAN FRANCISCO, CA — January 29, 2025 — Today, the San Francisco Foundation and Latino Prosperity, along with a coalition of California-based foundations and nonprofit organizations, formally requested Attorney General Rob Bonta take immediate legal action to protect OpenAI’s nonprofit charitable assets. This request is in response to OpenAI’s recently announced plan to restructure its operations into a for-profit entity, which could jeopardize its nonprofit assets — with value estimates at as much as $157 billion — that are intended for public benefit.
Fred Blackwell, coalition member and CEO of San Francisco Foundation, emphasized the importance of maintaining the integrity of charitable assets: “OpenAI’s proposed conversion to a for-profit entity undermines the very foundation of what those assets were intended to support. It is imperative that we ensure these resources remain dedicated to the public good, especially in communities most vulnerable to the systemic inequities and harms associated with AI.”
“Failure to hold OpenAI accountable risks setting a harmful precedent that could jeopardize the integrity and stability of nonprofits, along with the foundational principles that protect charitable assets and their intended purposes,” said Orson Aguilar, CEO of LatinoProsperity and a member of the coalition. “We believe the Attorney General has a responsibility to uphold California’s charitable trust laws and ensure OpenAI follows the law.”
The coalition’s letter to Attorney General Bonta outlines detailed concerns regarding OpenAI’s compliance with laws governing nonprofit assets and urges the Attorney General to initiate a robust investigation into OpenAI’s past and planned operations. The coalition argues that allowing OpenAI to proceed with its restructuring without appropriate safeguards would result in significant private gain at the public’s expense.
Precedent exists for maintaining the public benefit of nonprofit assets through a for-profit conversion. In the 1990s, California oversaw multiple successful nonprofit-to-for-profit conversions in the healthcare industry. Of note, Blue Cross of California transferred most of its managed care business to its for-profit subsidiary, WellPoint, in 1993. Under regulatory pressure, Blue Cross agreed to fund two independent foundations, The California Endowment and The California Healthcare Foundation, with cash and stock valued at over $3 billion. Similarly, when Health Net, one of California’s largest health care and insurance p
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