Meta Platforms Inc. has urged California Attorney General Rob Bonta to intervene and block OpenAI’s proposed transition from a non-profit organization to a for-profit entity. In a letter addressed to Bonta, Meta expressed its concerns, stating that OpenAI should not be allowed to misuse assets originally developed under the guise of a charitable mission for significant private gains.
The letter highlights Meta’s apprehensions about OpenAI’s shift, which it believes could have profound implications for Silicon Valley and the broader technology industry. OpenAI initially established itself as a non-profit but has since achieved commercial success, notably with its AI chatbot, ChatGPT, which generates billions of dollars in revenue annually. OpenAI’s CEO, Sam Altman, has emphasized the necessity of abandoning its non-profit status to attract investors and fund the company’s ambitious projects. However, Meta argues that such a transition undermines the principles on which OpenAI was founded and could set a precedent for other startups to exploit similar strategies.
Meta’s letter also took an unexpected turn by expressing support for Elon Musk in his legal battle against OpenAI. This stance is particularly noteworthy given the history of public animosity between Musk and Meta CEO Mark Zuckerberg, including talks of a physical cage fight between the two tech moguls just last year.
Meta’s Argument Against OpenAI’s Transition
In its appeal to Bonta, Meta pointed out that OpenAI’s original certificate of incorporation, filed in 2015, explicitly stated its purpose as a non-profit dedicated to advancing artificial intelligence for the public good. The document further asserted that the organization’s assets were irrevocably dedicated to charitable purposes, prohibiting any distribution of net income or assets to private individuals.
Meta argued that OpenAI leveraged its non-profit status to raise billions in tax-exempt funding from investors and the public. The company assured stakeholders that it operated without a profit motive, yet it now seeks to shift to a for-profit model while retaining the benefits that its non-profit origins provided. Meta contends this behavior undermines trust in the non-profit sector and distorts the competitive landscape for startups.
The letter also called for a thorough investigation into whether OpenAI’s past practices as a non-profit align with its legal obligations. Meta raised concerns about potential mismanagement or misappropriation of the non-profit’s assets, including their transfer to third-party entities.
Concerns About Broader Implications
Meta warned that OpenAI’s proposed restructuring could lead to a paradigm shift in Silicon Valley. The company fears that this move might incentivize startups to initially position themselves as non-profits to secure tax-exempt funding and later transition to for-profit entities once their technologies achieve commercial viability. Such practices, Meta argues, could distort market dynamics and create an uneven playing field for other companies.
Moreover, Meta highlighted the risks of allowing non-profit investors to reap for-profit rewards while simultaneously benefiting from government tax breaks. This approach could erode public trust and force other startups to adopt similar strategies to remain competitive.
OpenAI’s Response
In response to Meta’s concerns, OpenAI’s board chair, Bret Taylor, defended the company’s plans, emphasizing its commitment to advancing artificial general intelligence (AGI) for the benefit of humanity. Taylor assured that any potential restructuring would ensure the continued existence and success of OpenAI’s non-profit entity. He also stated that the non-profit would retain full value for its stake in the for-profit company, enabling it to further its mission.
Taylor added that OpenAI’s non-profit board is working with independent financial and legal advisors to navigate the transition responsibly. However, the urgency of the matter remains critical, as OpenAI must successfully complete its restructuring within two years or risk returning the billions of dollars it has raised—along with accrued interest.
Competitive Motivations and AI Rivalry
Meta’s challenge to OpenAI’s transition is not solely rooted in altruism. The company has its own competitive interests in the AI space, with Zuckerberg aiming to make Meta AI the most widely used assistant globally. Meta’s ambitions also include the development of AI superintelligence, a field in which OpenAI is a formidable competitor.
Meta’s Appeal for Immediate Action
Meta urged the California Attorney General’s office to act swiftly, citing the rapid pace of OpenAI’s for-profit conversion as a pressing concern. The letter described the case as a special circumstance that necessitates immediate intervention to protect public interests and maintain accountability.
Additionally, Meta expressed confidence in Elon Musk and Shivon Zilis as suitable representatives for Californian interests in the ongoing legal dispute against OpenAI. Both Musk and Zilis played pivotal roles in OpenAI’s early development and are well-positioned to address the company’s deviation from its original charitable mission.
Conclusion
Meta’s letter underscores its commitment to transparency and ethical practices in the burgeoning field of generative AI. The company emphasized the importance of holding OpenAI accountable to its foundational promise of developing safe and broadly beneficial AI, free from the pressures of commercialization. Meta concluded by offering its cooperation to Bonta’s office and reaffirming its belief that OpenAI’s actions warrant close scrutiny to prevent potential misuse of the non-profit model.