According to a report from the Wall Street Journal, Meta Platforms is calling on California’s attorney general to block OpenAI’s proposed transition to a for-profit entity.
Meta, in a letter to Attorney General Rob Bonta, expressed concerns that allowing OpenAI to switch to a for-profit model could establish a risky precedent where startups benefit from nonprofit status until they become profitable.
The letter stated, “OpenAI’s actions could have significant implications for Silicon Valley. If OpenAI’s new business model is approved, nonprofit investors would receive the same financial benefits as traditional for-profit investors, while also enjoying tax advantages provided by the government.”
Both Meta and the California AG’s office have not yet responded to requests for comment from Reuters.
Earlier, OpenAI requested a federal judge in California to dismiss Elon Musk’s request to stop the company’s shift to a for-profit structure. Musk had filed a lawsuit against OpenAI and its CEO, Sam Altman, alleging that they were prioritizing profits over the public good in advancing AI technology.
OpenAI’s chairman, Bret Taylor, assured that any potential restructuring would ensure the nonprofit’s continued existence and success, allowing it to pursue its mission effectively.
Meta expressed its support for Musk’s efforts to advocate for the public’s interests in determining whether OpenAI should transition to a for-profit entity. Musk, a former co-founder of OpenAI, has since launched a competing AI company called xAI.