It’s a bit tragic that Ilya and company achieved the exact opposite of what they intended apparently, by driving those they attempted to slow down into the arms of people with more money and less morals. Well.
Indeed, I think trying to do it that way increases the risk that the single private organization captures its regulators and ends up without effective oversight. To put it bluntly: I think it's going to be easier, politically, to regulate this technology with it being a battle between Microsoft, Meta, and Google all focused on commercial applications, than with the clearly dominant organization being a nonprofit that is supposedly altruistic and self-regulating.
I have sympathy for people who think that all sounds like a bad outcome because they are skeptical of politics and trust the big brains at OpenAI more. But personally I think governments have the ultimate responsibility to look out for the interests of the societies they govern.