OpenAI Just Cut a Deal With California. Critics Say It’s Full of Holes

This story was originally published by CalMatters . Sign up for their newsletters.

OpenAI said Tuesday it would restructure as a for-profit company in a way that addresses concerns from California Attorney General Rob Bonta, who signed off on the transformation.

But details of the move could revive worries that OpenAI is misusing charitable tax exemptions, experts and advocates told CalMatters. The ChatGPT maker is putting its nonprofit arm nominally in control of the for-profit entity, but there are numerous ways the for-profit company could end up calling the shots, these people said. There are also important, unanswered questions about the safeguards that are supposed to keep that from happening.

Under the restructuring, the newly-formed OpenAI Foundation will hold about 26 perc