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OpenAI Under Threat: Midas Project Accuses of Tax Law Violations

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by Giorgi Kostiuk

6 hours ago


The independent watchdog for artificial intelligence, known as Midas Project, has filed a complaint against OpenAI, accusing it of potential tax law violations that could threaten its nonprofit status.

Details of the Midas Project Complaint

Midas Project has stated that it has documented 'abandoned safeguards, rife conflicts of interest, financial upside for the CEO if the organization goes for-profit, and even potential misuse of charitable funds.' The complaint was filed with the US Internal Revenue Service, alleging that OpenAI board members have 'massive financial conflicts.'

Conflicts of Interest in OpenAI Leadership

The complaint alleges that OpenAI's board structure creates conflicts of interest that violate federal rules governing tax-exempt non-profits. In particular, CEO Sam Altman's dual role as both CEO of OpenAI’s for-profit operations and board member of its nonprofit creates situations where he may benefit personally at the nonprofit's expense.

Incidents and History of OpenAI

OpenAI was founded in 2015 as a nonprofit organization aimed at ensuring that advanced general intelligence benefits humanity, not shareholders. However, last November, the company entered preliminary talks to transition to a for-profit structure, which were reportedly abandoned back in May, reaffirming its commitment to its nonprofit status.

The situation involving OpenAI and Midas Project highlights the importance of adherence to standards for nonprofits and the necessity for transparency in governance, which is especially pertinent in the rapidly evolving world of technology.

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