Since the moment OpenAI announced its plan for transitioning to a for-profit company, it has faced multiple hurdles. The ambition was first hobbled by a legal battle initiated by co-founder Elon Musk, and surprisingly, Meta is now siding with Musk to dash OpenAI"s for-profit dreams.
As The Wall Street Journal reported, Meta has written a letter to California Attorney General Rob Bonta, asking for a government intervention to block OpenAI"s efforts to switch to a for-profit model.
Meta alleges that OpenAI has used its non-profit status to raise billions of dollars from investors, further adding that the AI firm "should not be allowed to flout the law by taking and reappropriating assets it built as a charity and using them for potentially enormous private gains."
"OpenAI"s conduct could have seismic implications for Silicon Valley. If permitted, OpenAI"s restructuring would represent a paradigm shift for technology startups; allowing this restructuring would only entice investors to launch organizations as non-profits, collect hundreds of millions of dollars in tax-free donations to support research and development, and then assume for-profit status as its technology becomes commercially viable."
OpenAI CEO Sam Altman has already informed the staff about the firm"s plan to transition to a for-profit model in 2025. This move is expected to put the AI firm in a better position to attract investors" funds and promise them a return on investment.
In response to Meta"s recent move, OpenAI board chair Bret Taylor told The Verge, "While our work remains ongoing as we continue to consult independent financial and legal advisors, any potential restructuring would ensure the non-profit continues to exist and thrive, and receives full value for its current stake in the OpenAI for-profit with an enhanced ability to pursue its mission."
While Elon Musk first opposed OpenAI"s transition and even filed an injunction in a California court to block the move, the AI firm recently revealed some internal emails and conversations showing that the billionaire wanted OpenAI to go for-profit.
It remains to be seen if OpenAI could complete its transition to for-profit, but the move is less likely to face any legal hurdle in 2025.