Meta is urging California's attorney general to block OpenAI's planned conversion to a for-profit company, reported the Wall Street Journal (WSJ) on Friday. Meta's move followed an earlier legal feat by billionaire Elon Musk in November to stop OpenAI from shifting to for-profit.
In a letter to Attorney General Rob Bonta dated Thursday, Meta said that allowing OpenAI to become a for-profit company would set a dangerous precedent of allowing start-ups to enjoy the advantages of non-profit status until they are poised to become profitable.
"OpenAI's conduct could have seismic implication for Silicon Valley. 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 in for-profit companies while also benefiting from tax write-offs bestowed by the government," the WSJ reported based on Meta's letter.
Earlier on Friday, OpenAI asked a federal judge in California to reject a request by billionaire Elon Musk to halt the ChatGPT maker's conversion to a for-profit company.
Musk sued OpenAI and its CEO Sam Altman in August, claiming they violated contract provisions by putting profits ahead of the public good in the push to advance AI.
In November, Musk asked US District Judge Yvonne Gonzalez Rogers in Oakland for a preliminary injunction blocking OpenAI from converting to a for-profit structure.
OpenAI chairman Bret Taylor said in a statement that the company will carry on business as usual and continue to consult independent financial and legal advisors for any potential restructuring arrangement that would ensure OpenAI's continuity, while gaining full value for the company's current stake in the for-profit OpenAI entity.
In its letter, Meta said it supported an effort by Musk to represent the interests of the public in deciding whether OpenAI will be allowed to become a for-profit company.
Musk, who was an OpenAI co-founder, has since launched a competing artificial intelligence company, xAI.
