(Reuters) -Meta Platforms is urging California’s attorney general to block OpenAI’s planned conversion to a for-profit company, the Wall Street Journal reported on Friday.
In a Thursday letter to Attorney General Rob Bonta, Meta said allowing OpenAI to become a for-profit company would set a dangerous precedent by allowing startups to enjoy the benefits of nonprofit status until they are ready to become profitable, WSJ reported.
“OpenAI’s behavior could have seismic consequences for Silicon Valley. If OpenAI’s new business model holds, nonprofit investors would get the same profit benefit as those who invest in for-profit companies the conventional way, while also benefiting from tax write-offs. from the government,” the WSJ report quotes Meta in the letter.
Meta and 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 from 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 terms by putting profits over the public interest in their efforts to advance AI.
In November, Musk asked U.S. District Judge Yvonne Gonzalez Rogers in Oakland for a preliminary injunction blocking OpenAI from transitioning to a for-profit structure.
“While our work remains ongoing and we continue to consult with independent financial and legal advisors, any potential restructuring would ensure that the nonprofit 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,” OpenAI President Bret Taylor said in a statement.
In its letter, Meta said it supports an effort by Musk to represent the public’s interests in deciding whether OpenAI should become a for-profit company, the WSJ report said.
Musk, co-founder of OpenAI, has since launched a rival artificial intelligence company, xAI.
(Reporting by Rishabh Jaiswal in Bengaluru; Editing by Diane Craft)
