Latest news with #SanFranciscoFoundation
Yahoo
05-05-2025
- Business
- Yahoo
OpenAI says its nonprofit will remain in control of its for-profit business
ChatGPT maker OpenAI said Monday that its nonprofit will remain in control over its for-profit business, as the startup moves forward with plans to change its organizational structure. The move comes after a coalition of California nonprofits, foundations and labor groups called on the state's attorney general to investigate OpenAI's decision to transition its nonprofit's commercial subsidiary to a for-profit public benefit corporation. The coalition raised concerns about how OpenAI's charitable assets would be protected. "We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware," Chief Executive Sam Altman wrote in a letter to OpenAI employees. OpenAI started in 2015 as a nonprofit research lab but later found success developing products and services like ChatGPT and text-to-video tool Sora. As the competition among AI companies heated up, OpenAI said it needed to change its structure to raise more money. The startup recently raised $40 billion, bringing its valuation to $300 billion, but part of that funding could change if it does not shift its corporate structure by the end of the year. Read more: An AI 'gold rush.' What to know about OpenAI's record $40-billion funding round OpenAI received pushback on its transition plans from Meta and some philanthropic leaders, including the San Francisco Foundation, who raised concerns with the state attorney general's office. The company also was sued by its co-founder Elon Musk. On Monday, San Francisco Foundation said it continues to hold concerns about OpenAI's transition. 'While we are glad to see that OpenAI is responding to the questions that have been raised about their proposed restructuring, its announcement today doesn't address the fundamental problem at issue: the independence from profit-seeking of the OpenAI nonprofit,' Fred Blackwell, CEO of the San Francisco Foundation, said in a statement. Last month, OpenAI named nonprofit commissioners, including labor leader Dolores Huerta, to help its nonprofit amplify its philanthropic efforts. Read more: Elon Musk's feud with OpenAI CEO Sam Altman, explained OpenAI said it will advance its public benefit corporation plan in continued conversation with its investor Microsoft, civic leaders, offices of the attorneys general in California and Delaware and the nonprofit commissioners. The announcement provides clarity to the company's original plans that it outlined in December, in which it said the public benefit corporation would "run and control OpenAI's operations and business." On Monday, Altman said that the nonprofit board will become a "big shareholder" in the public benefit corporation "in an amount supported by independent financial advisors, giving the nonprofit resources to support programs so AI can benefit many different communities, consistent with the mission." Read more: Coalition urges California attorney general to halt OpenAI's for-profit transition Altman expressed commitment to OpenAI's nonprofit continuing to control the for-profit business as it does today. "That will not change," he wrote. Other AI startups that are structured as public benefit corporations include Anthropic and Musk's xAI. Sign up for our Wide Shot newsletter to get the latest entertainment business news, analysis and insights. This story originally appeared in Los Angeles Times. Sign in to access your portfolio
Los Angeles Times
05-05-2025
- Business
- Los Angeles Times
OpenAI says its nonprofit will remain in control of its for-profit business
ChatGPT maker OpenAI said Monday that its nonprofit will remain in control over its for-profit business, as the startup moves forward with plans to change its organizational structure. The move comes after a coalition of California nonprofits, foundations and labor groups called on the state's attorney general to investigate OpenAI's decision to transition its nonprofit's commercial subsidiary to a for-profit public benefit corporation. The coalition raised concerns about how OpenAI's charitable assets would be protected. 'We made the decision for the nonprofit to stay in control after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware,' Chief Executive Sam Altman wrote in a letter to OpenAI employees. OpenAI started in 2015 as a nonprofit research lab but later found success developing products and services like ChatGPT and text-to-video tool Sora. As the competition among AI companies heated up, OpenAI said it needed to change its structure to raise more money. The startup recently raised $40 billion, bringing its valuation to $300 billion, but part of that funding could change if it does not shift its corporate structure by the end of the year. OpenAI received pushback on its transition plans from Meta and some philanthropic leaders, including the San Francisco Foundation, who raised concerns with the state attorney general's office. The company also was sued by its co-founder Elon Musk. On Monday, San Francisco Foundation said it continues to hold concerns about OpenAI's transition. 'While we are glad to see that OpenAI is responding to the questions that have been raised about their proposed restructuring, its announcement today doesn't address the fundamental problem at issue: the independence from profit-seeking of the OpenAI nonprofit,' Fred Blackwell, CEO of the San Francisco Foundation, said in a statement. Last month, OpenAI named nonprofit commissioners, including labor leader Dolores Huerta, to help its nonprofit amplify its philanthropic efforts. OpenAI said it will advance its public benefit corporation plan in continued conversation with its investor Microsoft, civic leaders, offices of the attorneys general in California and Delaware and the nonprofit commissioners. The announcement provides clarity to the company's original plans that it outlined in December, in which it said the public benefit corporation would 'run and control OpenAI's operations and business.' On Monday, Altman said that the nonprofit board will become a 'big shareholder' in the public benefit corporation 'in an amount supported by independent financial advisors, giving the nonprofit resources to support programs so AI can benefit many different communities, consistent with the mission.' Altman expressed commitment to OpenAI's nonprofit continuing to control the for-profit business as it does today. 'That will not change,' he wrote. Other AI startups that are structured as public benefit corporations include Anthropic and Musk's xAI.
San Francisco Chronicle
02-05-2025
- Business
- San Francisco Chronicle
Oakland Mayor-elect Barbara Lee announces key appointments to address public safety and economy
Oakland Mayor-elect Barbara Lee announced Friday a transition team of politicians, business leaders, philanthropists, attorneys and nonprofit heads that will help her lead the city when she takes office. The group is made up of 16 people, including Fred Blackwell, CEO of the San Francisco Foundation, Keith Carson, a retired Alameda County supervisor, Quinn Delaney, founder of the Akonadi Foundation, and Carrie Owen Plietz, regional president for Kaiser Permanente Northern California. The transition committee will be tasked with helping Lee implement her 10-point plan to address Oakland's challenges, and with creating working groups to address homelessness, public safety and labor issues, improve small business support and establish public-private partnerships, she has said. 'Oaklanders demand — and deserve — transparency, accountability, and results. With the help of these dynamic leaders and residents, this is what we will deliver together,' Lee said in a statement Friday. 'For all of Oakland, I want to thank those who have agreed to serve — and am filled with gratitude for your leadership and support, which will help Oakland turn the next chapter.' Lee has said she intends to implement her 10-point plan within her first 100 days in office. It prioritizes developing public safety strategies, streamlining building permits and cleaning up trash, among other goals. Lee has also proposed engaging the CEOs of the top 10 biggest companies in the city on public-private partnerships. Lee, who beat former city council member Loren Taylor in last month's election to be the city's next mayor, will likely be sworn in this month. Her swearing in will occur after the Alameda County Registrar of Voters certifies the vote and the Oakland City Council votes to accept the results. Other members of her transition team announced Friday include Michael Barnett, an Oakland homeowner and scientist at Lawrence Berkeley National Lab; Creighton Davis, former chair of the city's community policing advisory board and current board member of Black Cultural Zone, a nonprofit; Jeanette Dong, chief strategy officer of Alameda Health System; Viola Gonzales, former president of the League of Women Voters; Robert Harris, an executive member of the NAACP; Freada Kapor Klein, a venture capitalist; Paul Markovich, president and CEO of Ascendium; Maximus Simmons, student board director of the Oakland school district; and Sheryl Walton, co-chair of the Block by Block Organizing Network (BBBON), a coalition of community activists in Oakland. Danny Wan, former executive director of the port of Oakland, Barbara Parker, former Oakland city attorney, and Ben Rosenfeld, the former San Francisco city controller, will advise the transition team, Lee also announced Friday. Lee, a progressive stalwart, has promised to unify the city amid challenging times as Oakland grapples with a budget crisis that has resulted in layoffs, a hiring freeze and other cost-saving measures. Last week, she announced that Barbara Leslie, president of the Oakland Chamber of Commerce, and Keith Brown, head of the Alameda Labor Council, will lead her transition committee. Interim Mayor Kevin Jenkins, who was council president before voters recalled ex-Mayor Sheng Thao in November, is expected to release a budget proposal on Monday. The proposal, which he said in a statement would include the input of incoming elected officials, will map out the city's priorities over the next two years. But rising costs and struggling revenue streams pose challenges for the city to make major headway on some of its priorities, which include addressing public safety concerns and illegal dumping.
Yahoo
10-04-2025
- Business
- Yahoo
California faces pressure to wade into Elon Musk-Sam Altman row
SAN FRANCISCO — California Attorney General Rob Bonta is facing growing pressure from major nonprofits to take action against OpenAI — a move that could potentially place him in an awkward alliance with Elon Musk. The pressure campaign comes as Musk's rivalry with former business partner Sam Altman is heating up in court over OpenAI's plan to become a for-profit company. Bonta is already probing OpenAI's shift to a for-profit model, but should his office further shoulder into the legal dispute, they could find themselves on the same side as estranged early OpenAI funder Musk, who has taken the Delaware-incorporated company to court to block its conversion. OpenAI countersued the billionaire in federal court Wednesday. Musk and Bonta would make even stranger bedfellows. The top state lawyer has increasingly become the face of California's Trump resistance, suing the administration over the Musk-led DOGE effort to fire thousands of federal workers and choke off federal funding to California and other states. Meanwhile, Bonta is also defending the state's social media laws against Musk's legal challenges. A coalition of nonprofit leaders sent a letter to Bonta's office on Wednesday, including from the San Francisco Foundation and Economic Security Project, as well as labor groups, calling on the AG to 'take action to transfer OpenAI's charitable assets to a truly independent nonprofit or nonprofits.' 'This isn't about trying to stop the conversion of nonprofit to for-profit,' Fred Blackwell, the CEO of the San Francisco Foundation, told POLITICO's California Decoded newsletter. 'It's really purely about making sure the assets that were accumulated for the public good stay that way.' The group points to the state attorney general's office intervening in the 1990s when nonprofit health companies like The California Wellness Foundation (a petition signatory) were established through a transfer of charitable assets. 'Similarly, it is imperative that the Attorney General demand the distribution of OpenAI, Inc.'s charitable assets to independent nonprofit entities that will use these assets for public benefit,' the petition said. Blackwell's group sent a letter to Bonta's office in January to that effect before filing the longer detailed petition, where they characterize potentially the entirety of OpenAI's latest $300 billion valuation as charitable assets. 'Our Board has been very clear that we intend to strengthen the non-profit so that it can deliver on its mission for the long term. We're not selling it, we're doubling down on its work,' an OpenAI spokesperson said in a statement. The company previously told POLITICO it plans to make its nonprofit parent company a shareholder in the new for-profit enterprise, and to appoint a committee to oversee and distribute the assets that flow into it. OpenAI met with the petitioners before they filed their petition Wednesday and offered to have their respective legal teams meet, according to an email seen by POLITICO, and a person with knowledge of the situation who was not authorized to discuss it publicly. Bonta's office said in an emailed statement that the California "Department of Justice is committed to protecting charitable assets for their intended purpose.' His office declined to comment on any ongoing investigations, but referenced its letter to OpenAI requesting restructuring plans and the value of its charitable assets. OpenAI countersued Musk in a California court on Wednesday, directly disputing his claims and accusing him of intentionally trying to hamstring OpenAI as he builds his own competitor, xAI. 'Elon's nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit,' the company wrote on X, the site Musk owns. The Delaware attorney general's office has said it is in conversation with OpenAI and is reviewing the matter. Musk's attorneys have tried to bring Bonta into the case he filed against OpenAI on public interest grounds, but so far the attorney general has declined, said Rose Chan Loui, a nonprofit law expert at UCLA. Bonta 'is trying to get out of the federal case mostly on the argument that they can't be dragged into federal court,' she said. But 'Elon Musk has filed a brief saying that we're not dragging you in as a defendant, we're dragging you as a matter that concerns you.' At stake is not just the open question of how much of the company's $300 billion valuation should be conserved as nonprofit assets, Loui said. The company in raising its latest $40 billion funding round agreed to return half that amount if it does not make the change to a for-profit this year. Like this content? Consider signing up for POLITICO's California Decoded newsletter.
Politico
10-04-2025
- Business
- Politico
California faces pressure to wade into Elon Musk-Sam Altman row
SAN FRANCISCO — California Attorney General Rob Bonta is facing growing pressure from major nonprofits to take action against OpenAI — a move that could potentially place him in an awkward alliance with Elon Musk. The pressure campaign comes as Musk's rivalry with former business partner Sam Altman is heating up in court over OpenAI's plan to become a for-profit company. Bonta is already probing OpenAI's shift to a for-profit model, but should his office further shoulder into the legal dispute, they could find themselves on the same side as estranged early OpenAI funder Musk, who has taken the Delaware-incorporated company to court to block its conversion. OpenAI countersued the billionaire in federal court Wednesday. Musk and Bonta would make even stranger bedfellows. The top state lawyer has increasingly become the face of California's Trump resistance , suing the administration over the Musk-led DOGE effort to fire thousands of federal workers and choke off federal funding to California and other states. Meanwhile, Bonta is also defending the state's social media laws against Musk's legal challenges . A coalition of nonprofit leaders sent a letter to Bonta's office on Wednesday, including from the San Francisco Foundation and Economic Security Project, as well as labor groups, calling on the AG to 'take action to transfer OpenAI's charitable assets to a truly independent nonprofit or nonprofits.' 'This isn't about trying to stop the conversion of nonprofit to for-profit,' Fred Blackwell, the CEO of the San Francisco Foundation, told POLITICO's California Decoded newsletter . 'It's really purely about making sure the assets that were accumulated for the public good stay that way.' The group points to the state attorney general's office intervening in the 1990s when nonprofit health companies like The California Wellness Foundation (a petition signatory) were established through a transfer of charitable assets. 'Similarly, it is imperative that the Attorney General demand the distribution of OpenAI, Inc.'s charitable assets to independent nonprofit entities that will use these assets for public benefit,' the petition said. Blackwell's group sent a letter to Bonta's office in January to that effect before filing the longer detailed petition, where they characterize potentially the entirety of OpenAI's latest $300 billion valuation as charitable assets. 'Our Board has been very clear that we intend to strengthen the non-profit so that it can deliver on its mission for the long term. We're not selling it, we're doubling down on its work,' an OpenAI spokesperson said in a statement. The company previously told POLITICO it plans to make its nonprofit parent company a shareholder in the new for-profit enterprise, and to appoint a committee to oversee and distribute the assets that flow into it. OpenAI met with the petitioners before they filed their petition Wednesday and offered to have their respective legal teams meet, according to an email seen by POLITICO, and a person with knowledge of the situation who was not authorized to discuss it publicly. Bonta's office said in an emailed statement that the California 'Department of Justice is committed to protecting charitable assets for their intended purpose.' His office declined to comment on any ongoing investigations, but referenced its letter to OpenAI requesting restructuring plans and the value of its charitable assets. OpenAI countersued Musk in a California court on Wednesday, directly disputing his claims and accusing him of intentionally trying to hamstring OpenAI as he builds his own competitor , xAI. 'Elon's nonstop actions against us are just bad-faith tactics to slow down OpenAI and seize control of the leading AI innovations for his personal benefit,' the company wrote on X , the site Musk owns. The Delaware attorney general's office has said it is in conversation with OpenAI and is reviewing the matter. Musk's attorneys have tried to bring Bonta into the case he filed against OpenAI on public interest grounds, but so far the attorney general has declined, said Rose Chan Loui, a nonprofit law expert at UCLA. Bonta 'is trying to get out of the federal case mostly on the argument that they can't be dragged into federal court,' she said. But 'Elon Musk has filed a brief saying that we're not dragging you in as a defendant, we're dragging you as a matter that concerns you.' At stake is not just the open question of how much of the company's $300 billion valuation should be conserved as nonprofit assets, Loui said. The company in raising its latest $40 billion funding round agreed to return half that amount if it does not make the change to a for-profit this year. Like this content? Consider signing up for POLITICO's California Decoded newsletter .
