California Attorney General Asks Meta to Block OpenAI’s For-Profit Reorganization

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Meta Platforms, a leading Californian company specializing in cultivating generative AI capabilities.

Meta is deeply concerned about OpenAI’s attempt to transition from its non-profit status, under which it has operated thus far, to establish a for-profit entity. We strongly recommend a thorough examination of the proposed transaction, accompanied by an assessment of the character and timing of any potential transfer of assets from OpenAI’s non-profit organization to other entities. The failure to hold OpenAI accountable for its decision to operate as a nonprofit could lead to a proliferation of similar startup ventures, ostensibly charitable but ultimately driven by profit motives. Californians have pressing concerns that demand immediate attention to put a stop to this behavior. All for-profit activities of OpenAI and its affiliated entities must be temporarily suspended to ensure the protection of both traders and consumers.

In 2015, OpenAI formally established itself by filing its certificate of incorporation with the State of Delaware, as recorded in public documents.

On its deeply personal website, OpenAI reasserted this commitment years after the initial statement.

Backed by a non-profit status, OpenAI secured billions of dollars in funding from investors to further its stated mission. The corporation publicly committed to operating without any financial incentives or revenue motivations. The public had every right to rely on that guarantee. 

As OpenAI seeks to evolve its position while preserving the entirety of advantages that have allowed it to succeed thus far. That’s flawed. Can AI corporations like OpenAI be permitted to exploit publicly funded research, initially intended as charitable endeavors, for their own enormous private profits? 

Additionally, the suggested transformation by OpenAI does not simply pose a hypothetical risk of exploitation by a corporation in the future. It is crucial that OpenAI also examines whether its past practices align with its responsibilities as a non-profit organization, particularly regarding the distribution of assets to external parties and any potential depletion of its intellectual property.  

The potential fallout from OpenAI’s actions could be nothing short of revolutionary in its impact on the tech industry in Silicon Valley. If permitted, OpenAI’s proposed restructuring would revolutionize the expertise startup landscape; allowing this shift would primarily incentivize entrepreneurs to establish non-profits, secure hundreds of millions in tax-free donations to fund research and development, and then transition to a for-profit model as their technology becomes commercially viable?

If OpenAI’s innovative new corporate model proves authentic, non-profit entities could enjoy similar for-profit returns as investors who invest traditionally in for-profit companies, while also leveraging federal tax incentives and ultimately benefiting the broader public. The proposed policy would likely distort the market by mandating that startups in search of funding adopt a similar growth strategy, stifling innovation and diversity. 

As the court’s observers continue to speculate about the potential outcomes of this highly anticipated case, one thing remains certain: the fate of Twitter’s future hangs precariously in the balance. Will Elon Musk succeed in his quest for a more inclusive and participatory platform, or will Shivon Zilis’ skepticism prevail, plunging the social media landscape into uncertainty? Altman, No. 4:24-cv-04722-YGR (N.D. Cal.). While we may recommend that your employer take immediate action, we envision that Mr. Musk and Ms. The California-based Zilis are well-positioned to represent the interests of their fellow Californians in this regard. Given their formative involvement in OpenAI’s inception and governance, they possess a unique understanding of the organization’s original purpose and how its current actions stray from its philanthropic mandate.

As a champion of openness and transparency, Meta is committed to fostering a culture of collaboration and trust within the rapidly evolving realm of artificial intelligence. OpenAI’s charitable pledge to cultivate AI that is both shielded and beneficially expansive, untainted by commercial interests, constitutes a vital commitment that must be upheld. As OpenAI rapidly accelerates its transition to a for-profit entity, the urgency surrounding its next steps becomes increasingly palpable.

Thank you for considering our views; we appreciate the opportunity to address any questions you may have.

Respectfully,

Meta Platforms