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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

Michael Jackson documentary set to release after massive re-write

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Michael Jackson documentary set to release after massive re-write
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‘Michael’ — a new movie about the King of Pop – is drumming up big buzz. The film was produced in-part by the co-executors of the late singer’s estate, and has some critics questioning whether it is too focused on sanitizing the singer’s troubled image.

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‘Clayface’ trailer teases DC Studios’ first proper horror movie

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‘Clayface’ trailer teases DC Studios’ first proper horror movie

The DC universe is going full on body horror.

DC Studios released its first trailer for “Clayface” on Wednesday, giving audiences a glimpse of the gruesome origins of the shape-shifting Batman villain.

Set to an eerie rendition of the Flaming Lips’ “Do You Realize??,” the teaser flashes among various images of up-and-coming Hollywood actor Matt Hagen (portrayed by Tom Rhys Harries) before and after a violent encounter as the camera slowly zooms toward his haunted eyes and bloody, bandaged face as he is recovering on a hospital bed.

The clip also includes footage of Hagen’s clay-like, malleable face, which he appears to gain after some sort of scientific procedure.

According to the DC description, “Clayface” will see Hagen transformed into a “revenge-filled monster” and explore “the loss of one’s identity and humanity, corrosive love, and the dark underbelly of scientific ambition.”

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“Clayface,” set for an Oct. 23 release, will be the third DCU film to hit theaters since James Gunn and Peter Safran took over DC Studios and reset (most of) its comic book superhero franchise. The studio’s upcoming slate also includes “Supergirl,” which will hit theaters June 26, as well as “Man of Tomorrow,” the sequel to Gunn’s 2025 blockbuster “Superman,” announced for 2027.

Who is Clayface?

Clayface is a DC Comics villain usually affiliated with Batman. The alias has been used by a number of different characters over the years, but they all usually possess shape-shifting abilities due to their clay-like bodies. Created by Bill Finger and Bob Kane, the original Clayface was a washed-up actor turned criminal who first appeared in a 1940 issue of “Detective Comics.”

Matt Hagen was the name of the second Clayface, who first appeared in an issue of “Detective Comics” in the 1960s. He was the first to have shape-shifting powers, which he gained after encountering a mysterious radioactive pool of protoplasm.

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Other versions of Clayface have been introduced in various media since.

Who is in ‘Clayface’?

The upcoming film stars Tom Rhys Harries as rising Hollywood actor Hagen. The cast also includes Naomi Ackie, who is seen in the trailer, reportedly as the scientist Hagen turns to for help following his disfigurement. Also set to appear are David Dencik, Max Minghella and Eddie Marsan, as well as Nancy Carroll and Joshua James.

Who are the ‘Clayface’ filmmakers?

Director James Watkins, known for horror films including “Speak No Evil” (2024), is helming “Clayface.” The script was written by prolific horror scribe Mike Flanagan (“The Haunting of Hill House,” “Doctor Sleep”) and Hossein Amini (“The Snowman”).

The producers are Matt Reeves, Lynn Harris, James Gunn and Peter Safran. Exective producers include Michael E. Uslan, Rafi Crohn, Paul Ritchie, Chantal Nong Vo and Lars P. Winther.

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Miyamoto says he was surprised Mario Galaxy Movie reviews were even harsher than the first | VGC

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Miyamoto says he was surprised Mario Galaxy Movie reviews were even harsher than the first | VGC

Nintendo’s Shigeru Miyamoto says he’s surprised at the negative critical reception to the Super Mario Galaxy Movie.

As reported by Famitsu, Miyamoto conducted a group interview with Japanese media to mark the local release of The Super Mario Galaxy Movie.

During the interview, Miyamoto was asked for his views on the critical reception to the film in the West, where critics’ reviews have been mostly negative.

Miyamoto replied that while he understood some of the negative points aimed at The Super Mario Bros Movie, he thought the reception would be better for the sequel.

“It’s true: the situation is indeed very similar,” he said. “Actually, regarding the previous film, I felt that the critics’ opinions did hold some validity. “However, I thought things would be different this time around—only to find that the criticism is even harsher than it was before.

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“It really is quite baffling: here we are—having crossed over from a different field—working hard with the specific aim of helping to revitalize the film industry, yet the very people who ought to be championing that cause seem to be the ones taking a passive stance.”

As was the case with the first film, opinion is divided between critics and the public on The Super Mario Galaxy Movie. On review aggregate site Rotten Tomatoes, the film currently has a critics’ score of 43% , while its audience score is 89%.

Shigeru Miyamoto says he was surprised by Mario Galaxy Movie reviews.

While this is down from the first film’s scores (which were 59% critics and 95% public) it does still appear to imply that the film’s target audience is generally enjoying it despite critical negativity.

The negative reception is unlikely to bother Universal and Illumination too much, considering the film currently has a global box office of $752 million before even releasing in Japan, meaning a $1 billion global gross is becoming increasingly likely.

Elsewhere in the interview, Miyamoto said he hoped the film would perform well in Japan, especially because it has a unique script rather than a simple localization as in other regions.

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“The Japanese version is a bit unique,” he said. “Normally, we create an English version and then localize it for each country, but for the first film, we developed the English and Japanese scripts simultaneously. For this film, we didn’t simply localize the completed English version – instead, we rewrote it entirely in Japanese to create a special Japanese version.

“So, if this doesn’t become a hit in Japan, I feel a sense of pressure – as the person in charge of the Japanese version – to not let [Illumination CEO and film co-producer] Chris [Meledandri] down.

“However, judging by the reactions of the audience members who’ve seen it, I feel that Mario fans are really embracing it. I also believe we’ve created a film that people can enjoy even if they haven’t seen the previous one, so I’m hopeful about that as well.”