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Right now, OpenAI is something unique in the landscape of not just AI companies but huge companies in general.

OpenAI’s board of directors is bound not to the mission of providing value for shareholders, like most companies, but to the mission of ensuring that “artificial general intelligence benefits all of humanity,” as the company’s website says. (Still private, OpenAI is currently valued at more than $300 billion after completing a record $40 billion funding round earlier this year.)

That situation is a bit unusual, to put it mildly, and one that is increasingly buckling under the weight of its own contradictions.

For a long time, investors were happy enough to pour money into OpenAI despite a structure that didn’t put their interests first, but in 2023, the board of the nonprofit that controls the company — yep, that’s how confusing it is — fired Sam Altman for lying to them. (Disclosure: Vox Media is one of several publishers that has signed partnership agreements with OpenAI. Our reporting remains editorially independent.)

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It was a move that definitely didn’t maximize shareholder value, was at best very clumsily handled, and made it clear that the nonprofit’s control of the for-profit could potentially have huge implications — especially for its partner Microsoft, which has poured billions into OpenAI.

Altman’s firing didn’t stick — he returned a week later after an outcry, with much of the board resigning. But ever since the firing, OpenAI has been considering a restructuring into, well, more of a normal company.

Under this plan, the nonprofit entity that controls OpenAI would sell its control of the company and the assets that it owns. OpenAI would then become a for-profit company — specifically a public benefit corporation, like its rivals Anthropic and X.ai — and the nonprofit would walk away with a hotly disputed but definitely large sum of money in the tens of billions, presumably to spend on improving the world with AI.

There’s just one problem, argues a new open letter by legal scholars, several Nobel-prize winners, and a number of former OpenAI employees: The whole thing is illegal (and a terrible idea).

Their argument is simple: The thing the nonprofit board currently controls — governance of the world’s leading AI lab — makes no sense for the nonprofit to sell at any price. The nonprofit is supposed to act in pursuit of a highly specific mission: making AI go well for all of humanity. But having the power to make rules for OpenAI is worth more than even a mind-bogglingly large sum of money for that mission.

“Nonprofit control over how AGI is........

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