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Coalition urges California attorney general to halt OpenAI's for-profit restructuring

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Coalition urges California attorney general to halt OpenAI's for-profit restructuring

A coalition of California nonprofits, foundations and labor groups are raising concerns about ChatGPT maker OpenAI, urging the state attorney general to halt the artificial intelligence startup’s plans to restructure itself as a for-profit company.

More than 50 organizations, led by LatinoProsperity and the San Francisco Foundation, signed a petition that was sent to Atty. Gen. Rob Bonta’s office on Wednesday, requesting he investigate the Sam Altman-led company.

“OpenAI began its work with the goal of developing AI to benefit humanity as a whole, but its current attempt to alter its corporate structure reveals its new goal: providing AI’s benefits — the potential for untold profits and control over what may become powerful world-altering technologies — to a handful of corporate investors and high-level employees,” the petition said.

San Francisco-based OpenAI began as a nonprofit in 2015 and later launched a for-profit subsidiary to oversee its commercial operations. Currently, the nonprofit’s board oversees that subsidiary, which develops products and services including ChatGPT and text-to-video tool Sora.

But as the competition among AI companies heated up, OpenAI said it needed to change its business structure to raise more money. In December, OpenAI said it would explore transitioning its commercial subsidiary into a public benefit corporation, a type of for-profit business where the OpenAI nonprofit would have an ownership stake but would no longer control it.

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When OpenAI began as a nonprofit research lab, there were no plans for a product — just plans to put out research papers, Altman told newsletter Stratechery in March.

Over time, OpenAI has grown to be a leader in the AI space, with 500 million people using ChatGPT weekly. If he could go back, Altman said he would have set up the company differently.

“We knew that scaling computers was going to be important, but we still really underestimated how much we needed to scale them,” Altman said in a conversation with Harvard Business School.

Other AI startups including Anthropic and xAI are public benefit corporations.

The proposed change in OpenAI’s structure raised eyebrows among some nonprofit leaders. The petition was doubtful that OpenAI’s charitable assets would be protected, accused OpenAI of not complying with nonprofit rules and raised concerns that other startups would use a nonprofit structure “to create accelerated and amplified possibilities for individual financial benefit.”

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OpenAI’s nonprofit board went through a major shakeup in 2023. The board voted to fire Altman for alleged lack of consistent candor in his communications with board members. He was later reinstated five days later and the board was restructured, with several opposing board members leaving.

This month, OpenAI said it completed a $40-billion funding round led by SoftBank, bringing its valuation to $300 billion. As part of the deal, SoftBank can reduce its investment if OpenAI does not change its corporate structure by the end of the year.

Unlike for-profit businesses, nonprofits are limited in how funds raised are used.

“They can’t sell stock or offer returns,” said Neil Elan, a partner at law firm Stubbs, Alderton and Markiles LLP. “Equity is what drives a lot of these high valuation models. It’s also difficult to fully compete with Meta, Microsoft and Google, which have access to a lot more resources … without comparable funding.”

OpenAI now ranks as the second most valuable privately held company, tied with TikTok’s parent company ByteDance, according to research firm CB Insights. The private firm with the highest valuation is Elon Musk’s SpaceX at $350 billion.

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“This is a kind of unprecedented conversion in terms of its size and we just want to make sure that the attorney general really exercises his powers to protect those charitable assets,” said Orson Aguilar, CEO and founding president of LatinoProsperity, an L.A.-based nonprofit that focuses on advancing policies that build wealth in the Latino community.

Some nonprofit leaders said what’s happening with OpenAI reminds them of the transition that nonprofit healthcare providers made to for-profits in the 1990s. Government leaders stepped in to help regulate that process.

LatinoProsperity, San Francisco Foundation and other nonprofits first raised concerns to the attorney general in January.

Bonta has sought more information regarding OpenAI’s restructuring, with his deputy attorney general reaching out to the AI startup and requesting it provide more details. Earlier this year, Bonta’s office told news outlet CalMatters that it’s an ongoing investigation and the department “is committed to protecting charitable assets for their intended purpose and takes this responsibility seriously.”

Aguilar says “there hasn’t been any meaningful action.”

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Some of OpenAI’s competitors have opposed the company’s plans. Last year, Meta wrote to the attorney general. Musk, a co-founder of OpenAI who now runs rival xAI, sued OpenAI, seeking to stop OpenAI from changing its corporate structure.

Nathanael Fast, director of the Neely Center for Ethical Leadership and Decision Making at USC Marshall School of Business, thinks OpenAI will be able to move forward with its plans despite the opposition.

“The big question is, what will happen to the values that they have once all the dust settles and they become a corporation that is competing with other for-profit corporations?” Fast said. “Will they have unique values that they hold on to from their early days as a nonprofit? Or will they look just like any other profit-oriented company?”

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Movie Reviews

Movie review: Supergirl is a blast

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Movie review: Supergirl is a blast

Last year’s “Superman” ended with Iggy Pop singing “Because I’m a punk rocker, yes I am” — an ironic coda for a superlatively square hero. But it rings straightforwardly true for Superman’s cousin.

Milly Alcock’s Kara Zor-El, or Supergirl, sports not a spandex suit but a Blondie T-shirt. When we meet her in Craig Gillespie’s “Supergirl,” she’s been on an interstellar bender for days. She’s more Courtney Love than Clark Kent.

Nonchalant and sarcastic, Kara is also a little Han Solo-ish, you might say, given that she moves capriciously through the galaxy in her junky spaceship while getting in fights in extraterrestrial bars. She’s a welcome, jagged riff on more buttoned-up superheroes, and Alcock is terrific in the role. If only “Supergirl” was as good as she is.

While the latest DC release, and second under James Gunn’s stewardship, has its moments, “Supergirl” struggles to match Kara’s punk-rock energy with an equally spirited supporting cast and story.

Skepticism seems to have gathered for “Supergirl” ahead of its release. Many fans have argued it wasn’t the right next step for DC Universe. But I’m not so sure. Alcock’s breezy cameo in “Superman” was one of that movie’s highlights. Handing the follow-up to her, and her faithful floating dog Krypto, strikes me as an extremely natural next step. When in doubt, follow the dog.

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And much of “Supergirl” is winning. It resides almost entirely in space, touching down only momentarily on Earth. In its consistently creative production design, clever needle drops and underdog story arc, “Supergirl” resides a little closer to Gunn’s “Guardians of the Galaxy” movies than other DC entries. Its outer space is filled with cosmic detritus, mean characters and cute critters. Seth Rogen as the voice of a tiny alien co-piloting a space bus is an inspired concoction, as is a shabbier sci-fi realm with rest stops along the intergalactic highway.

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Justin Baldoni and wife break silence after ‘It Ends With Us’ legal battle with Blake Lively

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Justin Baldoni and wife break silence after ‘It Ends With Us’ legal battle with Blake Lively

Justin Baldoni has broken his silence after reaching a settlement in a lengthy and highly publicized legal dispute with Blake Lively.

Baldoni and his wife, Emily Baldoni, presented a united front in an Instagram video the couple shared Wednesday that began, “So we have not spoken publicly for the better part of the last two years, and it’s not because we haven’t had anything to say, because Lord knows we have.”

The “It Ends With Us” actor and director said that although they’d wanted to address the debacle that involved dueling lawsuits with Lively, nearly two years of tit-for-tat fodder and culminated in a confidential settlement, “something was telling us not to.”

The couple said they prayed about when to make a public statement. “This feels like the moment,” Emily said.

“What does feel important,” she continued, “is that we can genuinely say that we are sitting here today feeling immense gratitude for so many things and so many people and so many things that have happened to us.”

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“Gratitude has saved us,” Justin added.

“I also feel that it’s important as we say that — in that gratitude — it doesn’t negate the injustice and the pain that we have also felt in the last few years, and we’ve had to wrestle with so many things and try to understand so many things,” Emily said. “How could something like this even happen? Let alone disguised as a fight for women. So much to unpack. And the truth is, reality is, is that there’s been a lot of trauma for us to move through as a family, which also makes it hard to speak.”

“We don’t even know this is the right thing to say, but we just know we need to share something,” Justin said. “What I will say is that there have been so many painful things that have been spoken into existence — “

“Untruthful,” Emily broke in.

“We didn’t want to add to the noise, so we just wanted to let the justice system run its course,” he said.

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“And the truth and the facts have spoken for themselves,” Emily said.

The couple’s statement comes a year and a half after Lively filed a bombshell lawsuit against Baldoni alleging sexual harassment, retaliation and several other charges on the heels of a messy “It Ends With Us” summer release and press tour that fueled rumors of on-set turmoil.

Less than a month after the allegations against Baldoni rallied Hollywood against him, he countersued Lively, her publicist Leslie Sloane and her husband, Ryan Reynolds, for $400 million in damages, claiming they’d smeared his name in the press and wrestled away his control of the film. His suit was later dismissed.

In May, two weeks ahead of the trial, Lively and Baldoni reached an agreement to resolve their legal dispute, bringing an abrupt end to the contentious battle.

“The parties in the Blake Lively and Wayfarer Studios litigation have reached an agreement to resolve the matters,” lawyers for both sides said in a joint statement.

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“The end product — the movie ‘It Ends With Us’ — is a source of pride to all of us who worked to bring it to life. Raising awareness, and making a meaningful impact in the lives of domestic violence survivors — and all survivors — is a goal that we stand behind. We acknowledge the process presented challenges and recognize concerns raised by Ms. Lively deserved to be heard. We remain firmly committed to workplaces free of improprieties and unproductive environments. It is our sincere hope that this brings closure and allows all involved to move forward constructively and in peace, including a respectful environment online.”

In June, a federal judge ordered Baldoni and his production company to pay Lively’s attorney fees related to his unsuccessful defamation lawsuit against her, but rejected her bid for additional damages.

“So, how are we doing?” the filmmaker said in the Instagram video. “We are healing, and if you’ve ever been through something traumatic, you know that healing isn’t linear. It lives different every day, and we have had to rethink for ourselves what is real. What matters, and it’s this. It’s our family. It’s our friends. It’s our community. It’s our faith.”

Times staff writer Josh Rottenberg contributed to this report.

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‘The Guest’ Review: Trine Dyrholm Gives a Scorcher of a Performance in a Gutsy Danish Party-Gone-Wrong Drama

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‘The Guest’ Review: Trine Dyrholm Gives a Scorcher of a Performance in a Gutsy Danish Party-Gone-Wrong Drama

A family and friends gather for a naming-day ceremony at a Danish seaside hotel, but an unexpected appearance by one uninvited attendee (Trine Dyrholm) ruptures the veil of bland, happy-clappy familial unity in director Mads Mengel’s gutsy, well-wrought debut feature, The Guest.

The most audacious move here may be Mengel and co-screenwriter Christian Bengtson’s choice to write something that will inevitably invite comparisons with Festen (The Celebration), arguably the most notorious Danish-language film of the last 30 years, which similarly revolved around a bougie gathering disrupted by angry revelations. But there’s a savvy 2026 vibe about the way the film refuses to create florid melodrama out of quotidian crisis, and instead observes with generosity as the characters grope awkwardly toward emotional détente and mutual forgiveness.

The Guest

The Bottom Line

When wetting the baby’s head goes too far.

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Venue: Karlovy Vary Film Festival
Cast: Simon Bennebjerg, Trine Dyrholm, Josephine Park, Peter Gantzler, Petrine Agger, Mette Klakstein Wiberg, Kristine Kujath Thorp, Buster Lund Luscher
Director: Mads Mengel
Screenwriter: Christian Bengtson, Mads Mengel

1 hour 40 minutes

Festen-alumnus Dyrholm, having a bit of a career moment with outstanding performances both here and in the recent The Girl With the Needle among others, leads a uniformly excellent cast in a work that deserves celebration on the festival circuit and beyond.

Dyrholm’s Vibeke is technically the first person we meet, although she’s seen only in shadow at first as she smokes and drives while her unattached seatbelt, caught outside by a closed door, clatters on the road. This is the kind of unsafe driving her son Karl (Simon Bennebjerg) so deplores, a point of contention later on in the story when he will steal her car keys in interest of her own safety and that of others.

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But well before we get to that flashpoint, the film introduces Karl, effectively the film’s protagonist, as he arrives at the swanky resort with his wife Emilie (Mette Klakstein Wiberg) and their infant son Elliot (Buster Lund Luscher). The young family, who’ve chosen this new, secular tradition instead of a christening to welcome their child to the world, are there a day before the ceremony to meet up with core family members.

As this advance party settles down for dinner, a table that includes Karl’s sister Rikke (Josephine Park) and Emilie’s parents Frank (Peter Gantzler) and Kirsten (Petrine Agger), there’s a surprise: Vibeke is coming, courtesy of Rikke’s invitation. Karl is quietly furious and seems determined to turn her away, even when she shows up minutes later. Poor Frank and Kirsten look on confused, determinedly polite in their insistence that all family members should be welcome.

Bengtson and Mengel’s economical script carefully dripfeeds backstory as the film unfolds to explain that Karl hasn’t spoken to his mother in years, that Rikke has taken over all the daily mom management and that she’s very worn out by it. Even so, she insists Vibeke is regularly taking her medication and isn’t a problem these days, although to Karl every weird anecdote and moment of emotional intensity is an augur of impending chaos. Rikke counters that their mother is just “big, that’s her personality not her condition.”

Interestingly, that specific condition is never named throughout, although armchair diagnosticians might spot many of the signs of bipolar disorder. But the film’s emotional focus on the person and her actions rather than the label is also very contemporary, reflecting a more holistic, inclusive mindset and approach to dealing with mental health issues.

Which is all fine and dandy, until Vibeke duly does skip a dosage and starts getting manic. One of the first signs of chemical imbalance arrives during the ceremony on the beach, when Vibeke carries little Elliot much further away from the shore than anyone wants, creating a panic. From there it just gets worse as Vibeke picks up on the censorious feeling emerging from the other party guests, who had found her so charming the night before when she’d led everyone to the casino to play roulette and diverted a bunch of partying teenagers from the room next to Karl and Emilie so they could get some sleep. When the toasts at the formal dinner begin, Vibeke’s mood darkens much further, and if we’ve all learned one thing from Festen, it’s be very afraid when a Dane gets up to make a toast.

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Cinematographer David Bauer’s nimble-footed lensing and use of natural light does indeed hark back considerably to the look of those Dogme 95 movies back in the day, as does the naturalistic editing style deployed by Louis Emil Ramm Seeberg. But there are plenty of sins against the rules of cinematic chastity that marked that movement, such as the ample space made for Lasse Aagaard’s affecting, low-key score that amps up the anxiety as Vibeke starts to spiral.

That said, Mengel keeps things simple in sonic terms when it really counts, letting the musicality of Dyrholm’s deep, sonorous voice ring out on its own in the big monologue scenes. She is, as ever, utterly mesmerizing but the performance is made even more powerful by the muted, expressive reactions of the rest of the cast as they look on, frozen like deer in the headlights of the car crash of pseudo-christening. Moments of levity puncture the gloom, but the final feeling is one of numbed sorrow and pity for all these kind, fallible people, just trying to do their best.

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