(Credit: Mandel NGAN and Alain JOCARD / AFP)
Meta has joined Elon Musk in urging California lawmakers to stop ChatGPT maker OpenAI from becoming a fully for-profit company.
OpenAI currently operates in a hybrid structure that includes a nonprofit and a commercial arm. However, it’s been reported that the startup is in discussions with California regulators about becoming a fully for-profit entity.
In a letter to Attorney General Rob Bonta, first reported by The Wall Street Journal, Meta alleged that the transition would have “seismic implications for Silicon Valley.”
“If OpenAI’s new business model is valid, nonprofit 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 letter says.
Earlier this month, Musk’s legal team asked the court for an injunction to prevent OpenAI from becoming a fully for-profit enterprise, which Musk said would cause "irreparable harm." The filing is the latest in a lawsuit that accuses OpenAI of defrauding investors, wire fraud, and anti-competitive practices.
Meta supports the injunction request. In its letter, Meta said Musk and his co-plaintiff Shivon Zilis are “qualified and well-positioned to represent the interests of Californians in this matter.”
The WSJ report comes as OpenAI hit back on Friday by publishing emails from Musk that suggested he favored a for-profit approach back when he was part of the company. According to OpenAI, Musk sent an email to CEO Sam Altman in 2015 saying the company's “structure doesn’t seem optimal.”
Musk went on to say that a “salary from the nonprofit muddies the alignment of incentives” and that it’s “probably better to have a standard C corp with a parallel nonprofit.” Musk also allegedly forwarded an email about China investing heavily in AI research facilities, commenting: "Maybe another reason to change course.”
OpenAI's blog also alleged that in 2018, Musk suggested that OpenAI merge with Tesla. Musk also allegedly sent an email to OpenAI executive Ilya Sutskever in 2017, suggesting a shareholding structure where he "would unequivocally have initial control of the company." Musk had not responded at the time of writing.
Musk and Meta have clashed in the past, most notably with Meta CEO Mark Zuckerberg agreeing to a cage fight against Musk that never happened.
It seems Zuckerberg, Altman, and Musk agree on one point: Donald Trump. Musk is working closely with the president-elect to cut government spending, while Zuckerberg and Altman have donated $1 million each to Trump's inaugural fund.