
The legal saga between entrepreneur Elon Musk and OpenAI isn’t just about billionaire tech moguls duking it out. It’s a pivotal moment highlighting the significance of charity governance.
The lawsuit filed by Musk (an early investor) against OpenAI reads like a cautionary tale of how a charitable mission can be derailed by commercial interests. OpenAI, once hailed as a beacon of altruism in the AI landscape, is accused of prioritising profit over its founding purpose – developing artificial general intelligence (AGI) for the public good.
OpenAI promised to focus on advancing AGI for humanity’s benefit. However, in a battle against the might of commercial rival Google’s Deepmind AI project, Musk’s lawsuit alleges OpenAI pivoted towards a $2 billion a year for-profit model, fuelled by significant funding from Microsoft.
In Australia, charities are legally required to adhere to the charitable purposes stated in their governing documents. One of the standards for ACNC charitable status is that an organisation must operate exclusively for charitable purposes. Charities who deviate from their purpose risk losing their charitable status and associated benefits, such as tax exemptions and deductible gift recipient (DGR) status.
The ATO has also recently identified commercial activities by NFPs and charitable entities and the use of NFP structures to fraudulently obtain tax benefits as emerging risks