Meta Platforms is urging California’s attorney general to block OpenAI’s planned conversion to a for-profit company, siding with Elon Musk in a battle between Silicon Valley’s most powerful artificial-intelligence players, The Wall Street Journal reported.
In a letter to Attorney General Rob Bonta dated Thursday, Meta said allowing the ChatGPT maker to become a for-profit company would set a dangerous precedent of allowing startups to enjoy the advantages of nonprofit status until they are poised to become profitable.
“OpenAI’s conduct could have seismic implications for Silicon Valley,” Meta wrote in the letter. “If OpenAI’s new business model is valid, non-profit investor would get the same for-profit upside as those who invest the conventional way in for-profit companies while also benefiting from tax write-offs bestowed by the government.”
OpenAI Chairman Bret Taylor said there will continue to be a nonprofit arm of OpenAI following a potential restructuring that will receive full value in its ownership stake of the for-profit, along with “an enhanced ability to pursue its mission” of ensuring AI benefits humanity.
Meta is one of OpenAI’s biggest competitors and has invested billions of dollars to develop its own AI technology that matches or exceeds ChatGPT. OpenAI is also closely allied with two large Meta rivals: Microsoft, which is OpenAI’s biggest investor, and Apple, which integrated ChatGPT into its own AI product.
TechCrunch reported Facebook’s parent company Meta is supporting Elon Musk’s effort to block OpenAI’s conversion from a non-profit company to a for-profit one.
As reported by The Wall Street Journal, Meta sent a letter to California Attorney General Rob Bonta arguing that allowing the shift would have “seismic implications for Silicon Valley.” And while the company asked Bonta to take “direct action,” it also said Musk and former OpenAI board member Shivon Sills “are qualified and well-positioned to represent the interests of Californians in this matter.”
“If OpenAI’s new business model is valid, non-profit investors would get the same for-profit upside as those who invest the conventional way for-profit companies while also benefiting from tax write-offs bestowed by the government,” Meta wrote.
Meta has become one of OpenAI’s big competitors in the AI market. Musk, meanwhile, was originally a co-founder at OpenAI before eventually splitting from the company, starting rival xAI, and taking legal action that includes seeking an injunction to stop its transition for a for-profit.
Engadget reported Meta sent a letter to California’s Attorney general on Thursday urging him to stop OpenAI from converting to a for-profit company, a move Meta says would be “wrong” and “could lead to a proliferation of similar start-up ventures that are notionally charitable until they are potentially profitable.
The letter from Meta Platforms to Attorney General Rob Bonta, first reported on The Wall Street Journal, comes on the heals of an injunction filed by Elon Musk at the end of November that also asked for OpenAI’s conversion to be blocked.
In my opinion, I think Meta Platforms is trying to convince Attorney General Rob Bonta to prevent OpenAI from becoming for-profit.