AI POLICY
Meta has asked California’s Attorney General, Rob Bonta, to block OpenAI’s plan to become a for-profit company, according to the Wall Street Journal.
In a letter dated Thursday, Meta warned that this change could create a risky precedent.
It argued that startups could take advantage of nonprofit tax benefits before switching to for-profit status, allowing nonprofit investors to gain the same financial rewards as for-profit ones while still benefiting from tax breaks.
Meta’s letter highlighted concerns that OpenAI’s business model could disrupt Silicon Valley norms by blurring the lines between nonprofits and for-profit companies.
This aligns with an ongoing legal dispute between OpenAI and its co-founder Elon Musk, who claims the company is putting profits ahead of public interest.
Here’s what you should know:
Meta says OpenAI’s move to a for-profit model risks creating confusion between nonprofit and for-profit rules.
Elon Musk has filed a lawsuit to block the transition, arguing it undermines public interest.
OpenAI defends the plan, saying the nonprofit will remain intact and continue its mission.
The year of lawsuits
Musk filed a lawsuit in August, accusing OpenAI of violating agreements by focusing on profits.
In November, he asked a federal judge to stop OpenAI’s shift.
OpenAI chairman Bret Taylor responded, saying any changes would ensure the nonprofit remains strong and continues its work, while also getting full value from its stake in the for-profit company.
Meta’s letter also supported Musk’s call for public interest to be considered in the decision.
Musk, who now runs his own AI company, xAI, has been critical of OpenAI’s recent decisions.
Meta and Musk teaming up was not on my 2024 Bingo list.