Ex-OpenAI Employees Challenge For-Profit Shift Amid Musk's Legal Battle

A dozen or so former OpenAI workers are resisting the startup's move to become a for-profit company while Elon Musk pursues his high-stakes court challenge against this transformation.
In a court filing made recently, the data technicians and scientists pleaded to retain a controlling interest in OpenAI's nonprofit organization, stating that any shift in corporate form that would decrease this control would essentially take away from the mission of the organization. The former employees who labored at OpenAI between 2018 and 2024 are being represented by Lawrence Lessig, a political activist and Harvard law professor.
Musk filed the lawsuit last year, charging OpenAI CEO Sam Altman with deviating from the startup's original charitable mission after it took on massive investments from Microsoft Corp. starting in 2019. Musk co-founded OpenAI in 2015 and resigned from its board in 2018, and subsequently, he started a rival generative AI startup, xAI, in 2023.
OpenAI argues that the new form will continue to advance its altruistic purpose, as the non-profit will maintain a substantial interest in the resulting future for-profit organization, which will be a public benefit corporation. This form is meant to place paramount importance not just on financial shareholders but also on the public good. OpenAI has indicated that reorganization must happen so that it can attract investors and finance its purpose.
“Our board has been very clear: our nonprofit isn’t going anywhere, and our mission will remain the same,” OpenAI said in a statement. “We’re converting our existing for-profit arm into a Public Benefit Corporation—similar to the structure of other AI labs like Anthropic, where some of these former employees now work, and xAI.”
The former staff filing highlights OpenAI's 2018 charter, under which the startup announces that it "is not organized for the private gain of any person" and is dedicated to seeing to it that AI is used safely. A number of these individuals have before raised objections to OpenAI's capacity to balance safety with commercialization of its technology.
Marc Toberoff, Musk's lawyer, said that the former employees' filing "affirms what we already knew." He alleged that Altman leveraged OpenAI's altruistic mission as a way to lure and take advantage of contributions from Musk and other leading AI talent.
Lessig would not comment on the situation. OpenAI has also come under further scrutiny as it moves to get regulatory approval for the restructuring. An AI safety advocacy group led by youth, Encode, raised concerns similar to those of Musk over OpenAI's move to become a for-profit entity. Meta Platforms Inc. has also called on California Attorney General Rob Bonta to freeze the restructuring in order to protect investors and consumers.
A federal judge last month rejected Musk's bid to temporarily put on hold OpenAI's restructuring as the court battle rages on, instead setting a trial in March. This week, OpenAI sued Musk, alleging he has waged a "relentless" campaign for a year to derail the startup and requesting a court order forcing him to desist.