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Editor's take: A complex legal and ethical battle is unfolding over whether OpenAI can switch to for-profit status. The result could have significant implications for AI development as well as the delicate balance between nonprofit missions and for-profit ambitions in the tech industry.
Meta Platforms has entered the fray in the ongoing dispute between OpenAI and Elon Musk, urging California's Attorney General Rob Bonta to block OpenAI's planned transition to a for-profit company. This move aligns Meta with Musk in a battle that pits some of Silicon Valley's most influential AI players against each other.
Meta wrote to Attorney General Bonta last week, arguing that allowing OpenAI to become a for-profit entity would set a dangerous precedent. The social media giant contends that such a move would enable startups to exploit the benefits of nonprofit status until they are on the brink of profitability.
"OpenAI's conduct could have seismic implications for Silicon Valley," Meta stated in the letter. The company further elaborated on the potential consequences, suggesting that if OpenAI's new business model is deemed valid, it could lead to a situation where "non-profit investors 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."
In response to these concerns, OpenAI Chairman Bret Taylor has assured that the company will maintain a nonprofit arm following any potential restructuring. This nonprofit entity would retain full value in its ownership stake of the for-profit division and have "an enhanced ability to pursue its mission" of ensuring AI benefits humanity.
The dispute between OpenAI and Elon Musk has been ongoing, with Musk filing a series of legal complaints against the AI company. Musk, who co-founded OpenAI in 2015 but left in 2018 amid a power struggle, has accused the company of betraying its original nonprofit mission and colluding with Microsoft, its largest investor, to dominate AI development.
Meta's involvement in this conflict is hardly surprising, given its position as one of OpenAI's biggest competitors. The company has invested billions in developing its own AI technology to rival ChatGPT. Also, OpenAI has close alliances with Microsoft and Apple, both major competitors of Meta.
In its letter, Meta expressed support for Musk and Shivon Zilis, a business and personal associate, in their efforts to represent public interests regarding OpenAI's potential transition to for-profit status. "Although we ask your office to take direct action, we believe that Mr. Musk and Ms. Zilis are qualified and well-positioned to represent the interests of Californians in this matter," Meta wrote.
The conflict has intensified recently, with OpenAI publishing internal documents to counter Musk's request for a preliminary injunction to block its transition to a for-profit company. These documents – as well as a post by OpenAI – state that Musk had previously supported the idea of a for-profit structure for OpenAI.
"When he didn't get majority equity and full control, he walked away and told us we would fail," OpenAI wrote.
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