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The Profit Problem: An Open Letter to OpenAI

37m 5s

The Profit Problem: An Open Letter to OpenAI

The discussion centers on OpenAI's mission and corporate governance. OpenAI was founded as a nonprofit with the charitable purpose of ensuring artificial general intelligence (AGI) is developed safely for humanity's benefit, not simply to win the race to build AGI. Its unique structure placed a for-profit entity entirely under the control of the nonprofit board, creating guardrails against profit motives undermining safety. However, a proposed restructuring threatened to decouple the for-profit development arm from this mission control, raising alarms that commercial incentives could override ethical commitments. Legal advocates, including Tyler Whitmer of Legal Advocates for Safe Science and Technology, have intervened through public letters to state attorneys general, arguing that such a change violates OpenAI's fiduciary duties. Their goal is to preserve the original governance model that legally binds the organization to its safety-first mission, using legal advocacy and potential litigation to address risks from powerful technologies.

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So I think that is the mission and that's honestly that's what we're out here trying to protect is opening eyes mission like we think it's extremely important and you know one of the things that I think it's important for people to recognize is you open AI is a technology company they're developing technology they're deploying AI systems you know they talk about developing a GI is part of what they do. But their charitable purpose and their mission is to ensure that a GI is safe and benefits all humanity not to develop a GI and so you know that distinction really ends up matter. You're listening to Bite Size Business Law where we discuss big issues in small doses this podcast is sponsored by the Ford University School of Law corporate law center which is run by Ford and one professor Richard Squire and me your host Amy Martella. Okay let's get down to business. Welcome back to Bite Size Business Law. Today's discussion goes to the very heart of what we're all afraid of when we talk about safe artificial general intelligence. How should we balance the need for investors to fund innovation and the pitfalls of a profit motive that might accompany investment with the important ethical considerations of AI development. Today's guest has done something specific and concrete to address this problem and ensure that AGI will be broadly beneficial to humanity. Tyler Whitmer is the founder president and CEO of legal advocates for safe science and technology after 15 years as a commercial litigator including as a partner at Quina manual. Tyler left private practice to focus on nonprofit work. He along with other notable names including renowned legal scholars and noble laureates wrote an open letter to the California and Delaware attorneys general opposing the restructuring of open AI. Tyler thank you so much for being here today. Thanks for having me. This is awesome. People ask all the time for us to talk more about AI, but I also find that you know people kind of have AI fatigue. So I'm very picky about what AI topics we actually to discuss. So when I heard about this one, I said we have we have to have you on because what's cool about this topic again, it goes to the very heart of like what we're all actually scared of. And that's doing something that might cause AI to go really off the rails. But before we get into all of that, why don't you tell us because you're a really interesting career path. We've got a lot of law students who listen in and they love hearing about stuff like this. So why don't you tell us a little bit about your own career path, maybe starting with law school? Sure. So I graduated from the University of Texas School of Law in 2006, you know, went to law school. I think it was the typical sort of liberal arts student who was smart and got good grades, but didn't know what they wanted to do next and went to law school. And I would not advise undergraduates to take that path. And necessarily I think you should go to law school if you know you want to go to law school. I graduated in 2006 was recruited by Quinn, loved it there. They allowed me to dress the way I'm dressed now and do most of my work that way. And they really kind of only cared about, you know, how good you are and how hard you are willing to work. And I really appreciated that about the firm. And I really thought I would be there for a little while and then go do something else. And then the financial crisis happened in 2008. And I ended up kind of making a career mostly out of litigating out of the financial crisis. So I did, I mean, I was considering myself a general general kind of commercial litigator, like a real generalist, but did a lot of work and financial related litigation, kind of stemming from the 2008 financial crisis. And then, you know, fast forward a dozen or so years. And, you know, that work had started to sort of run its course. I was sort of struggling to find meaning and the work that I picked up after those cases sort of started to come to a close. The pandemic happened and it really shifted the way I was viewing the world in my life more generally. And I decided to take some time off from the practice of law. And, you know, Quinn was nice enough to let me take leave to kind of figure out what I wanted to do next. And not every firm is going to give partners and certainly not associates. I don't think the ability to do that necessarily. But I think anyone who's in a place in life, whether financially or otherwise, where they could take some time off in a mid-career situation, take us a badicle. I really strongly encourage people to do that. I think it's great to have time to reset, figure out what your priorities are and if you need to change them, change them. And I did. So I took some time off and then I decided to focus my professional time on stuff that I knew I cared about, which one of the things I cared most about was making sure that technological innovation advances in science kind of go well for folks. I did a stint in house at a nonprofit that sponsored a bunch of projects that worked on similar issues. And in that role, I was really just in a house lawyer. I was really doing, you know, sort of like your regular in house lawyer gig. I learned a lot about being in house at a nonprofit, decided that really wasn't what I wanted to do. I kind of wanted to do more sort of object level work on the issues more directly and ended up founding last, which is an organization focused on using legal advocacy to make advances in science and technology safer for people and the planet. And we're a 501c3 nonprofit and a lot of the point of it was to sort of leverage my experience to try to advance that charitable goal. And also to figure out ways to get other folks in the legal industry involved in these issues, like really looking at, you know, what are potential catastrophic risks that could happen from new technology that we're developing as a society and the directions that science has headed. So what does last do? I mean, obviously we'll talk about the letter. That's one point of that and see. Is it impact litigation? What types of activities are engaged in day to day? Yeah. So public advocacy, like you see with the not for private game letter that we're going to talk about in detail. We're definitely following litigation. So we have litigation surveillance program set up to where we try to track cases that look like they're going to weigh in on issues where courts are going to weigh in and issues that matter to our mission. So for example, we filed amicus briefs in and you know, the point of filing of tracking those cases, of course, is to figure out there's ways that we can weigh in and be useful and directly in the development of the common law. You know, the niche that we see ourselves as fill in is sort of like there's a lot of organizations focused on policy. There's C4 is out there lobbying for regulation and legislation. And there wasn't really anyone focused on the judicial branch either at the state or sort of federal level and as far as we can tell, and I still haven't found them. So I don't think they're there. And so we've really been trying to focus our attention there in a lot of ways. And so we're focusing, you know, one of our projects is, like I said, tracking litigation that might affect issues that that we care about. So one example, we filed amicus briefs at the end of last year and then another one in March, in some cases where there's litigation about the origins of COVID-19. And that's addressing issues in virology research and the courts were writing opinions that sort of make it very difficult to hold researchers liable for even extremely irresponsible research and sort of like throwing the baby out with the bathwater is the way I would describe it. And so we filed some amicus briefs in appellate courts in the state court in New York and also now in the second circuit, dressing those issues, trying to make the common law a real deterrent to so like really irresponsible work in that area. And so yeah, and then we also do look at potential impact litigation ideas. You know, we're a young organization. So we haven't launched any boats of that type yet. But that is part of our remit for sure. And then you know, part of what we're doing is trying to partner with law firms and other legal professionals and trying to get them involved in these issues. Very cool. So Tyler, when did you personally first start becoming concerned about the direction of tech? Yeah, it's an interesting question like concerned about the direction is a hard one. So I mean, I read Ray Kurzweil's book. I think I was in law school at the time. So I'm kind of focused on artificial intelligence. I was a big sci-fi fan. I was aware of developments and kind of following that for a long time. You know, at some point, I think it was a 20 teams Rob Reed, who's a sci-fi author, but also just a social commentator did a series of medium posts on sort of biotech and the potential for. You know, new advances in biotech to make it easier for sort of like individual human beings to just cause enormous amounts of harm. You know, we've like live in a society where nuclear arms haven't killed everybody yet, but a lot of that is because it's really hard to make nuclear bombs. And one of the things that, you know, I got more worried about as I read and learn more about it was the ability of, you know, AI and then other technological advancements to sort of democratize technology and science that could cause catastrophic harm in a way that makes it more difficult to regulate than say clear arms. So that was sort of an ongoing, you know, over a course of years, I think, just like developing my views on that. It's been a long process, I guess. It's not a not a new thing that I started to think about recently. And so you went from being a partner at one of the world's biggest law firm to focusing on this and creating a nonprofit that is serving the social good in this arena. Most of that was sort of a personal journey, like it really, I got to a point in my practice at Quinn where I, you know, I lived relatively modestly. I didn't need my next, you know, distribution and I was really wanting to work on things that I felt kind of, you know, move the needle in the right direction more Lee in the world. And, you know, not that I think we were doing anything wrong at Quinn. Of course, but like I just didn't feel like my practice was always head in the direction, you know, focused on the issues that I cared about. And I really wanted to get to a place where that was more the case. And so yeah, I think I'm making it obviously a lot less money now than I was then. And it's been a big career change in a lot of ways. But I think it's been really worth it. I find the work that I'm doing now incredibly rewarding and fulfilling. And you know, that's it's been a great journey. We're glad you made the switch. So let's start talking about open AI. Now everyone knows what open AI is, right? People use it. They understand kind of what it is. But tell our listeners, what was their original mission? Yeah. So I mean, they started out as a research lab sort of, you know, they were really sort of a traditional nonprofit. And then they decided as part of their mission to to try to develop the technology that they were focused on. But, you know, open AI's mission. As they summarize it from their articles of incorporation. I think it's a fair summary is to ensure that artificial general intelligence is safe and benefits all of humanity. And I think that's, you know, it's a reasonable summary of what's in their articles. That's their official charitable purposes of 501 C3. You know, which is what we end up focusing on a lot, right? Is the actual where the rubber meets the road and the corporate governance issues here is the, you know, what's actually written into their articles. So I think that is the mission. And that's honestly, that's what we're out here trying to protect is opening eyes. is mission. We think it's extremely important. One of the things that I think it's important for people to recognize is OpenAI is a technology company. They're developing technology. They're deploying AI systems. They talk about developing AGI as part of what they do. But their charitable purpose and their mission is to ensure that AGI is safe and benefits all of humanity, not to develop AGI. That distinction really ends up mattering. Some of the guardrails that they put in place that we mentioned in the letter and that we're trying to protect with our public advocacy work here is about the ensuring that rather than developing bit. They have a commitment and they're chartered to stop and assist another safety focused lab if they were to get close to AGI first. The whole point of that is, OpenAI's mission is not to win the race to AGI. The mission is to ensure that AGI, whoever develops it, is safe and benefits all of humanity. That's the mission that we're trying to hold them to. It's so important to understand that distinction, especially for this discussion, because I think if you ask someone on the street, what is OpenAI's mission? They would say, "Making AI." Right. Right. Yeah. And I think making AI is one thing I've talked about, sort of making sure that the making AI is instrumental. That is a means to the end of safe and beneficial AGI. And I think one of the things I'm very concerned about, and I think a lot of folks in our coalition have been concerned about, is that means becoming the end itself. Instead of the development of the technology being a way to ensure the technology is safe and beneficial, it ends up being that the whole point is to develop the technology and get it distributed as widely as possible. And it's important that that should be a mean and not the end, to be consistent with their charitable purpose. Okay. Let's get a little legal nerdy for a second. What makes OpenAI's corporate structure so unique here? They have a pretty bespoke structure. And what makes it, I think, unique is really all the guardrails they put in place. So it's not totally crazy for non-profit organizations to have controlled or fully owned for-profit entities within their corporate structure. There's a lot of what is in OpenAI's corporate structure today. That if you look at it from a high level, it's not something that they're the only people out there doing. But they've really used that structure to sort of put guardrails in place so that they remain mission-focused. I mean, one of the biggest concerns at the founding of OpenAI was how profit motives could negatively impact the development of AGI and how AGI ends up affecting humanity. And trying to insulate development and deployment of the technology from those profit motives. And so OpenAI's structure isn't just a nonprofit over a for-profit. It is a nonprofit that completely controls a for-profit and then ties the commercial enterprises directly to the charitable mission of the organization. And the whole commercial enterprise is governed exclusively by the board of directors of the nonprofit. And so they put in a bunch of guardrails. And we list a lot of these guardrails in our April 17th letter. So you can go through there, there's a chart in that letter and then we update the chart in a follow-up letter we did on May 12th. And all of this is at notforprivategame.org if you want to go look at it. And it looks at the guardrails that OpenAI had in place and how we view them being affected by the restructuring as we understand it. Again, we're kind of going on what OpenAI has told the public about what they're doing. And so they're credit. They've updated the public multiple times on their blog, at least with some information, although there's still a lot of devils and a lot of details and a lot that we don't know. And so in some sense, you're sort of shooting at a target you can't quite see. Going back to the question though, I think the unique thing about the structure is the attempt to tie the entire organization into the fiduciary obligation to the charitable mission itself and then maintaining the enforceability of that. And then also having, you know, they have a very interesting, cap-profit structure that I think really is kind of bespoke and not something that I've seen anywhere else. And as far as I know, hasn't been established anywhere else where, you know, the expectation with AGI is that it might create massive economic growth and that a first mover in the space might capture a huge chunk of that. And so they kept the profits, they kept the returns for investors in a way that would then capture that long tail, assuming that AGI really does create that kind of economic growth, would capture that. And then that would go back into the nonprofit to benefit of humanity. >> Tell our listeners describe a little bit the restructuring and what was proposed. >> Right. So I think, you know, there was the initial announcements of restructuring. I think it started kind of being discussed in the press initially, sort of in the fall of last year. And then there was an announcement on their website in December about what they were going to do. And, you know, in that structure, it basically described that there would be a for-profit enterprise here, you know, that was going on and doing that, like, on one side of the work chart is that we're doing development and deployment. And then on, you know, completely separate from that, there was going to continue to be this nonprofit that would own some interest in the for-profit, right? And then would use that, use the resources it had by virtue of its ownership interest in the for-profit to do, I'll just say, you know, my reading of the announcement was to do sort of generic charitable good stuff. Science and healthcare, and things like that. And I have nothing against that. I just think it's, you know, opening AIs charitable mission is to ensure that AGI is safe. And I think it's really important for their charitable assets to go first towards ensuring that AGI is safe and benefits humanity. And then, you know, if down the line, we've made AGI safe and then those resources go to benefiting humanity, I could totally imagine that happening in sort of traditional sort of charitable initiatives. But it was very concerning to see what looked to me at the time of reading that announcement, like a for-profit that was going to go and just focus on developing and deploying and racing to AGI and the nonprofit that was going to be focused not necessarily on making sure that that technology was safe and would have no control over the for-profit. And then, you know, we released our letter in April, of the April 17th, was when our letter was made public. There was one other coalition of nonprofits that had made a petition letter public just before that. And then on, I think it was made a fifth that OpenAI announced that a change to the restructuring where they made it clear that the nonprofit would maintain control over the for-profit. And then the question in our mind became, what does control mean? And is it enough to continue what we see as the current structures really admirable attempt to, you know, maintain the charitable mission in the face of the pressures that profit motives can bring? Exactly. And so just to state the obvious, you know, this threatens the mission because now we're making decisions to benefit shareholders and not humanity in general. And there's no shortage of Sam Altman quotes that you can point to that demonstrate how passionate he is about safeguarding that structure and that nonprofit control. Like he's spoken about that no group of vimesters and no one should have the power and wealth they are describing here that a successful OpenAI might generate. He's talked about mitigating the risk of extinction from AI. And so why the change of heart? You know, I don't know. I'm not saying I'm Altman. I can't be sure. You know, what he and others have said publicly about it is really that they need this to raise the capital that's required to sort of stay at the bleeding edge of the technology and the development of AI towards AGI as a goal. You know, they've talked about wanting to simplify the capital structure. What any of that has to do with, you know, keeping nonprofit bored from controlling the organization or, you know, maintaining sort of the tie between what the organization is doing on the development and deployment front with the charitable mission, keeping those things locked together is something that we're very focused on. And at least in the initial descriptions of the restructuring, it seemed pretty clear that those were going to get disconnected in a way that we found concerning. So let's talk a little bit about the letter. How did you personally get involved? How did last get involved? I had been focused on these issues since hearing about the restructuring and the press and the fall and had been speaking with folks at encode it, which is an awesome, you know, youth advocacy organization that's focused on AI safety amongst other things, but like they're just a great organization and a great partner in this. You know, we were talking about, you know, what we could do to help move the needle here. And, you know, we'd seen there's obviously musk litigation and installment, Elon Musk and other plaintiffs of sued OpenAI in the Northern District of California. And at some, I can't remember exactly when it happened. It was in the late fall, musk moved for preliminary injunction, seeking to enjoy the restructuring. That was part of the relief he sought. And encode filed an amicus brief that I helped with in that litigation, arguing that an injunction would have benefited the public in the sense that it was good for the public for the restructuring not to move forward as it had been proposed at that time as we understood it at that time. But we were concerned that, you know, musk isn't a great spokesman for this in our minds. And we really wanted there to be folks that weren't musk and weren't connected to musk and, you know, weren't involved with musk out there, making it clear to the folks who were going to be making the decisions here, which we saw as being, you know, not just that court, but also the attorneys general of Delaware in California. And, you know, the attorney general of Delaware, Kathy Jennings filed an amicus brief in that case as well at the same time around the same time as the encode amicus brief, kind of saying, you know, we're looking at this, we care, you know, and we're keeping an eye on this. So we saw the AGs is really sort of like the way to advocate in front of folks who had powered to affect the decision making here in a way that was totally disconnected from musk and his lawsuit. And that was extremely attractive to us. And so that's why we've been doing what we've been doing since then. We connected with Paige Hedley, who's a former open AI employee, and sort of like the combination of last and myself and the folks in encode and Paige sort of helped coordinate and organize the rest of the coalition and get the letter out. So we will link for listeners the letter and the update letter in our show notes. But tell us what was the main message? What was like in one bullet? What would you say was the main message of the letter? I think the main message of the letter was really that we need to sort of protect open AI's charitable mission from open AI in some sense right now. And that the attorney's general currently have the power to really affect the situation because they're the primary regular. of charities and nonprofits and their jurisdictions. And that if the restructuring were allowed to go through as it was initially explained, you know, not only would it, in our minds, undermine the charitable mission of the organization, but would also remove the oversight of the AGs in a meaningful sense, because you would then have all the action happening in a for-profit that doesn't have the same kind of oversight by the AGs as the nonprofit does. And so we saw that as part of the problem, right? Is that, you know, in our minds, the most important things are to have the charitable mission, take primacy over profit motives. However, the structure shakes out, right? Make sure that the charitable mission takes primacy over the profit motives, and then have that enforceable by someone who has, you know, the will and the power and the resources to really hold open AI to account if they stray from their charitable mission. The current status quo, you know, I think there's things that could be done better, like the board could be empowered more, and other things could happen to the status quo to get a more robust structure than it is today. But we were very concerned that the way the restructure was going, you were going to not just see the charitable mission undermined and have profit motives be able to take precedence over the charitable mission instead of the other way around, but you would be taking the attorneys general out of the loop as a real enforcement mechanism. And so that was the main reason for the letter was to try to maintain the primacy of the charitable mission over profit motives and make that enforceable by a real, you know, valid enforcement body, which the AGs offices clearly are. And so can you just flesh out for our listeners to our really into the legal side of this? Explain to them, you know, why was the restructuring not only a bad idea, but also illegal? It's a bad idea because, you know, we really think that the charitable mission of opening AI is very important and it sounds like you agree, and we saw this is undermining it. You know, the issue with it, you know, being kind of contrary to law. I mean, there's statutory regime in California that's pretty robust that protects charitable trusts. And when you create a charity in California and you transfer assets or generate assets through that charity, those assets are imbued with the charitable trust that's then protected under California law. And we really felt, and I still believe that if the restructuring had gone forward as it was initially proposed, and I think unless a lot of work is done, including the way that it's being proposed now for what it's worth, you know, you're really taking charitable assets out of the charity and essence converting them to the benefit of investors or opening AI itself as a for-profit. We see that as extremely problematic and something that, you know, we're hoping Attorney General Bonta and his office is focused on. We see them, you know, continuing to move forward with an investigation there and that's encouraging. And then, you know, looking at the Delaware side of things, you know, there's a special fiduciary duty under Delaware law where a non-profits board owes a duty to the benefit of the charitable mission. And in this case, that's humanity in some meaningful sense, right? And in a similar way, it's my view that there's a strong argument that, you know, if you were to take control of development and deployment of AGI away from a non-profit whose mission is to ensure that AGI is safe and beneficial, you know, that would itself be, I think, a breach of that fiduciary duty. I mean, you are, in some sense, taking an asset that's absolutely mission-critical in some sense, right? Like, what better asset do you have if your goal is to ensure that AGI is safe and beneficial than control over one of the leading labs developing that technology in the world? And so, we see that as like, you know, there are real legal frameworks here that are meant to protect, right? Charitable missions and the beneficiaries of those charitable missions. And I still feel that the restructuring would have violated those legal structures. So Tyler, as you mentioned, eventually, open AGI pumped the brakes on this restructuring. Tell us about that and how big a role do you think this letter played in that, if at all? I mean, I hope it played a big role. I don't know for sure. You know, the time he suggests that, hopefully, it was at least part of the conversation. We've talked about this a bit and our sort of second letter was meant to sort of underline this for folks. You know, the way that they've described the changes they're making to the restructuring, I think, are a step in the right direction, but not nearly enough to get us comfortable with things. I mean, the revamped restructure would still involve taking what's currently an LLC that's directly controlled and managed by the nonprofit and turn that into a public benefit corporation. And they've now said publicly that they expect the nonprofit board to be able to basically pick the board of the PBC. That is control in some sense of that word, but they're still concerned that unless they bake a lot of these safeguards and guardrails that they put into the current nonprofit structure directly into that PBCs, articles of incorporation, you're still not going to have the kind of direct and absolute control that then ties the commercial enterprise to the charitable mission in a way that really protects the charitable mission and ensures that it's still enforceable by the AGs and their capacity as the regulators of charities. So, you know, they did change it in the sense that they've said it's going to be under nonprofit control. They've given a little bit of information or at least there's public reporting that they gave attorney general Bonta's office information about what that control might mean. There's still a lot of unanswered questions there and our May 12 letter really goes into what we think is absolutely critical for the revamped restructuring to actually, you know, be enough of a backing off of the initial plan to really help with the situation. And so, you know, our position here has been we're glad to hear that they're listening and it's great to see that they're in conversation with the attorneys general about this. We're really we're planning on keeping the pressure on to make sure that as they do the new sort of revamped restructuring as it were that it really gets to the points that we think are important to protecting the charitable mission. Is it true that they're removing caps for investor returns? I mean, they've said that they want to, you know, simplify the capital structure and they're talking about having this just be basically a PVC with traditional shares. There might be some special voting shares that would give more control than nonprofit. But I don't I can't think of a way, you know, I'm not a deal lawyer and I never was. So, you know, maybe there's more creative deal lawyers out there that have ideas that I can't imagine. But I haven't heard anyone come forward with a explanation of how you could use sort of a fairly vanilla PVC share owner situation to approximate the caps that are currently in place, which makes me think that they are doing away with the caps, which, you know, in our mind then there's a really tough question about how you value what goes to the nonprofit in terms of distributing those shares of the PVC for the economic benefit. Because it's going to be a tough job for some investment bankers to try to figure out what the current value is of that long tail that we described earlier where if AGI really sets off a huge economic growth and open AI, you know, capture some big chunk of that by virtue of being a first mover, like how do you convert that into a present value in PVC shares? I think is a really tough question and you know, one that will be keeping an eye on for sure. So it sounds like you think this compromise is actually inching back toward like our restructuring. That's not very good. I think it could still go well, but I think a lot of work has to be done to make that the case. If you just take what their public statements are been about it so far, it remains possible for it to go well, but by no means certain and a lot would need to be done beyond what they've said publicly right now to get us as an organization. I think I can't speak for the coalition, but I think I would expect some folks in our coalition would feel similar to me about this. Certainly the folks that signed, you know, the May 12 letter with us feel similarly about this. And you know, it's an open question, the extent to which they can use this PVC structure to approximate the current level of control and the current amount of enforceable primacy of the charitable mission over the profit motives that exist now. Like whether into what extent you can approximate that in the PVC structure, I think is kind of an open question. You know, one of the folks who signed our May 12 letter is Michael Dorf at UCLA. He sort of like an expert and he wrote the book on PVC's. The PVC's by law under Delaware, you have to have some balancing shareholder interests with the public benefit that's in the articles of incorporation of the PVC. And so figuring out to what degree you can tweak that balancing in the articles and make it still compliant with Delaware corporate law, but still get you to where we think you need to be in terms of making the charitable mission of the nonprofit, you take primacy over any profit motives at the PVC level. I think that's a challenging corporate structuring enterprise to take on. And we just hope that they do what they need to do with the PVC structure to get it to a place where there's remains that primacy of the charitable mission over the profit motives and that that remains enforceable by some outside enforcer with the resources and the ability to actually hold open AI to what they've said they're going to do. And so I think that you and the other authors have convinced me and a lot of people that I don't want a profit motive in the calculus of developing AI, but of course lots of AI companies are for profit. So even if open AI doesn't go for profit, like it's competitors well doesn't requiring open AI to stay under nonprofit control, kind of keep it behind in this race to develop a GI. And it makes sense to me and yet at the same time this goes back to the conversation we had earlier in our interview about the actual charitable purpose and mission of open AI, which is not to win the race to a GI right. It's to ensure that a GI is safe and benefits humanity. And you know like they tried to do it right and they really tried to sort of buying themselves to the mass here and like whether the pressures of the profit motives and try to do this the right way. They've set something up that's enforceable and I think when the pressures come to bear and it gets hard to enforce that, you know the answer shouldn't be oh well then we should just like let those guardrails go because it turns out it was really hard. I mean they knew it was going to be hard and they set this up precisely so that when they hit this situation they could stay true to their mission and we're trying to help them do that. Isn't staying true to the mission though for open AI almost self enforcing because if it were to go for profit right it's management it's board it's shareholders. They all have a vested interest in not being attacked by robots to right I mean like won't they naturally always put safety over profit because they also don't. want to go extinct. I would love if that were the case. I'm a capitalist and in a lot of ways you could have said the same thing about oil companies in the 70s and 80s when they figured out the climate change is going to be a problem and yet here we are. And you could have said the same thing about the organizations that were developing social media when it became clear what impacts that was having in our society and here we are. And listen to OpenAI itself, right? Listen to what they said in 2015 and between 2015 and 2020 when they were describing the negative consequences you could have to have truly transformative technology like this driven by a profit motive instead of a real drive to benefit humanity. So you don't have to take my word for it in some sense, but I really don't think you can count on the market working this out in a way benefits us. And so in this case it really is going to, I don't think it's going to be self-correcting. I don't think we can count on that. Unfortunately, I think a lot of the race dynamic, they predicted in a way that said this is a bad thing. They predicted and said man it would be really terrible if this became a race. And if it became a race we might need to have this non-profit structure so that we can step out of that race in some meaningful sense. And unfortunately the race that they predicted is here. And what you're describing is in some sense this competition to get there first, to get to AI first. And that brings with it a lot of problems. Well, I don't want to say too much more of your time, but I have a few questions about looking ahead and how you're thinking about the future. So my first one is a two-parter. What is your biggest concern for the direction of tech right now? Honestly, most stuff gives me hope. I think is the way I would say it. Like I really, I think I think there's going to be a lot of great things that come out of the current level of AI technology. And I think even advances a little bit beyond where we are now are probably going to go really well. And I think there's a lot of companies working on deploying the LLM technology that OpenAI is known for in ways that I think are great for people. And I think it's like I use them all the time in my work and in my personal life. And I think it's really great. I think one of the things I was concerned about in founding last was could have been seen as a leadite. And sort of like wanting to sort of like just stop technological advancement generally speaking. And that's really not what we're about or what I'm about. I'm mostly an optimist about technology and about science. I think most technology and science is great. I think we just need to be really careful in places where there's real potential for harm. And really isolating what those areas are. And then focusing on those and then helping the rest of science and technology flourish. So yeah, I think generally speaking, I'm a Lishan AI doing great things for humanity as long as we keep it from getting out of control. I think the things that give me the most concern me, you know, one of the things that concerns me a lot is the democratization of the ability to do grave harm. And so, you know, looking at sort of like one example from LLM's, right? I think, all the companies including OpenAI are testing their models to see the extent to which they could help sort of a normal person develop a biological weapon, for example. And I'm really glad they're doing that testing. And I think it's really important that they continue to do that testing because I'm I am really concerned, right? That you could have technology that basically could take a normal person with, you know, kind of normal resources and empower them to do, you know, create a biological weapon and release it. You know, we know from history that there's people who are just nihilists and want to cause harm for harm's sake. And, you know, there's going to be, you know, a few of those folks out there. And if you create technology that empowers anyone in the world to do that kind of harm, you're empowering those folks as well. And that is something that concerns me a lot. And so, and I think that that works from AI. There's also just biotech examples of the same thing. And so, you know, I think that's the thing that keeps me up at night most is is probably the democratization of the ability to do great harm. And then I'm also concerned about artificial intelligence if it becomes sort of super intelligent, like more intelligent than humanity. I don't think that we have a way of ensuring that humans remain relevant in a world where that kind of technology exists. And so that gives me a lot of concern as well. I'm at pains to make it clear that most technology I'm fully in support of. I'm pretty an early adopter of most tech that's out there including AI. And I think it's great. But I think we should be careful, especially as we're developing technology that really could be completely world-changing like AI. Absolutely. And Tyler, what is your advice to young lawyers who are interested in these issues and feel like maybe they'll be displaced by AI or they could be really successful for getting a handle on AI? How would you advise those young lawyers? Young lawyers and then folks who are considering law school, I'll speak to sort of both of those. You know, I think like most of what I did as a junior associate, when I was a junior associate, LLMs can do pretty well already. And so I think there's going to be a huge shift in the legal landscape as a profession, as this technology, I don't know if it's going to displace people immediately. I think there's a lot of uncertainty about how this is going to kind of shake out. But I think if you're planning on the next five or 10 years, being like the last five or 10 years in the legal industry with AI, you're kind of not thinking about this the right way. So I think that's a really important thing. And what I would say to young folks who are thinking that way still is, you know, read up what's going on, you know, get an idea of where this technology is headed and how it's going to affect your future career prospects. You know, and then I think like learning about the technology itself and where it's headed is a really important piece of this. And I think, you know, networking, I think like to the extent folks are really interested in what I'm doing and really focused on the safety of this technology and trying to make that go better for humanity. I think the ecosystem of lawyers that are focused on this issue is still extremely small. And so I think networking is just huge, you know, folks can find me now if they're listening to this and I'm assuming that I have time and I usually do and I can carve it out. I'm happy to speak with anyone, especially young folks who are just sort of getting into this about, you know, how they can help, you know, what I would recommend for them to do kind of going forward if they want to get into this kind of thing. And that would be law students, you know, folks who are considering law school or young lawyers. I speak to all of them all the time and I find that I find it really nice to speak with them. I think it's a cool thing and I'm happy to speak with folks about that. Well, Tyler, thank you so much for coming on today. You are doing such cool work in a truly existential space. So thank you for your work. And thanks for talking to us and telling us all about it. Thanks, Amy. Really appreciate it. Thanks to everyone at Fordham Law School, especially the Dean's Office and our corporate law center donors for supporting this podcast. Bytesized Business Law is produced by Weed at Podcasts. Listen and subscribe to Bytesized Business Law on Spotify, Apple or wherever you get your podcasts. The information in this podcast is for educational, informational, and entertainment purposes only, and does not constitute legal advice. Nor is it intended to promote the organizations with which our guests are affiliated. For more information, check out our show notes and thanks for listening.

Podcast Summary

Key Points:

  1. OpenAI's core charitable mission is to ensure artificial general intelligence (AGI) is safe and benefits all of humanity, not merely to develop AGI.
  2. OpenAI's unique corporate structure was designed with guardrails to insulate AGI development from profit motives, keeping the nonprofit board in full control of the for-profit entity.
  3. A proposed restructuring raised concerns that it would separate the for-profit development arm from nonprofit mission control, potentially prioritizing shareholder returns over public safety.
  4. Legal advocates, including Tyler Whitmer's organization, are using public advocacy and potential litigation to uphold corporate governance that aligns with OpenAI's original safety-focused mission.

Summary:

The discussion centers on OpenAI's mission and corporate governance. OpenAI was founded as a nonprofit with the charitable purpose of ensuring artificial general intelligence (AGI) is developed safely for humanity's benefit, not simply to win the race to build AGI. Its unique structure placed a for-profit entity entirely under the control of the nonprofit board, creating guardrails against profit motives undermining safety.

However, a proposed restructuring threatened to decouple the for-profit development arm from this mission control, raising alarms that commercial incentives could override ethical commitments. Legal advocates, including Tyler Whitmer of Legal Advocates for Safe Science and Technology, have intervened through public letters to state attorneys general, arguing that such a change violates OpenAI's fiduciary duties. Their goal is to preserve the original governance model that legally binds the organization to its safety-first mission, using legal advocacy and potential litigation to address risks from powerful technologies.

FAQs

OpenAI's mission is to ensure that artificial general intelligence (AGI) is safe and benefits all of humanity, not specifically to develop AGI.

This distinction matters because OpenAI's charitable purpose focuses on safety and broad benefit, not winning a race to develop AGI, which helps guard against profit motives overshadowing ethical considerations.

LAST (Legal Advocates for Safe Science and Technology) is a nonprofit that uses legal advocacy, including public advocacy and litigation tracking, to make advances in science and technology safer for people and the planet.

OpenAI had a nonprofit that completely controlled a for-profit entity, with guardrails tying commercial activities directly to its charitable mission and a cap-profit structure designed to reinvest excess returns for humanity's benefit.

They were concerned that the restructuring might separate the for-profit AGI development from nonprofit control, risking a shift in focus from safety and benefiting humanity to prioritizing shareholder profits.

LAST tracks litigation on relevant issues, files amicus briefs in courts to influence common law, and explores impact litigation to address risks from new technologies.

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