(Reuters) – Meta Platforms is appealing to California’s attorney general to block OpenAI’s planned transformation into a for-profit company, the Wall Street Journal reported on Friday.
In a letter to Attorney General Rob Bonta on Thursday, Meta said that allowing OpenAI to become a for-profit company would set a dangerous precedent of allowing startups to enjoy the benefits of nonprofit status as long as they remain profitable. Not ready to be, the WSJ reported.
“OpenAI’s conduct could have seismic implications for Silicon Valley. If OpenAI’s new business model is valid, nonprofit investors will receive the same benefits for for-profits as traditionally for-profit companies.” invest and also benefit from tax write-offs provided by the government,” the WSJ report said in the letter, citing Meta.
Meta and the California AG’s office did not immediately respond to a Reuters request for comment.
Earlier on Friday, OpenAI asked a federal judge in California to reject a request by billionaire Elon Musk to block the ChatGPT maker’s transformation into a for-profit company.
Musk sued OpenAI and its CEO Sam Altman in August, claiming they violated contract provisions by putting profits before the public good to advance AI.
In November, Musk asked U.S. District Judge Yvonne Gonzalez Rogers in Oakland for a preliminary injunction that would have prevented OpenAI from turning into a for-profit structure.
“While our work continues as we continue to consult with independent financial and legal advisors, any potential restructuring will ensure that the nonprofit will continue to exist and thrive, and have the ability to grow.” with OpenAI will achieve full value for its existing stake in its for-profit mission,” OpenAI chairman Brett Taylor said in a statement.
In his letter, Matta said he supported Musk’s effort to represent the public’s interest in deciding whether OpenAI would be allowed to become a profitable company, the WSJ report added.
Musk, who co-founded OpenAI, has since launched a competing artificial intelligence company, xAI.
(Reporting by Rishabh Jaiswal in Bengaluru; Editing by Diane Croft)
