Meta asks the US government to block OpenAI’s switch to a for-profit

Dear General Bonta:

 As a California institution that builds Generative AI technology, Meta Platforms, Inc. (“Meta”) is profoundly concerned astir OpenAI’s effort to shed the non-profit position nether which it was founded successful bid to found a for-profit entity. We impulse you to reappraisal this projected transaction, including the quality and timing of immoderate transportation of assets from OpenAI’s non-profit entity to different entities. Failing to clasp OpenAI accountable for its prime to shape arsenic a non-profit could lead to a proliferation of akin start-up ventures that are notionally charitable until they are perchance profitable. The People of California person nonstop and urgent interests successful stopping this behavior. All for-profit activities of OpenAI and its related entities should beryllium paused to protect investors and consumers alike.

In 2015, OpenAI revenge its original certificate of incorporation pinch the State of Delaware, which reads:

This Corporation shall beryllium a nonprofit corp organized exclusively for charitable and/or acquisition purposes wrong the meaning of conception 501(c){3) of the Internal Revenue Code of 1986, arsenic amended, aliases the corresponding proviso of immoderate early United States Internal Revenue law. The circumstantial intent of this corp is to supply backing for research, improvement and distribution of exertion related to artificial intelligence... The corp is not organized for the backstage summation of immoderate person... The spot of this corp is irrevocably dedicated to the[se] purposes... and nary portion of the nett income aliases assets of this corp shall ever inure to the use of immoderate director, serviceman aliases personnel thereof aliases to the use of immoderate backstage person.

OpenAI reaffirmed this committedness connected its very ain website years later:

Seeing nary clear way successful the nationalist sector, and fixed the occurrence of different eager projects successful backstage industry, [OpenAI] decided to prosecute this task done backstage intends bound by beardown commitments to the nationalist good. [OpenAI] initially believed a 501(c)(3) would beryllium the astir effective conveyance to nonstop the improvement of safe and broadly beneficial AGI while remaining unencumbered by profit incentives.

Taking advantage of this non-profit status, OpenAI raised billions of dollars successful superior from investors to further its purported mission. The institution represented to the State of California and the world that it would beryllium tally without immoderate profit motivation. Investors and the nationalist rightfully relied connected that assurance. 

Now, OpenAI wants to alteration its position while retaining each of the benefits that enabled it to scope the constituent it has today. That is wrong. OpenAI should not beryllium allowed to flout the rule by taking and reappropriating assets it built arsenic a kindness and utilizing them for perchance tremendous backstage gains. 

Moreover, OpenAI’s projected conversion represents not simply a future, imaginable maltreatment of firm form. We would besides impulse you to analyse whether OpenAI’s past practices are accordant pinch its obligations arsenic a non-profit – astir notably whether it has inappropriately depleted the assets of the non-profit by distributing assets to third-party entities.  

OpenAI’s behaviour could person seismic implications for Silicon Valley. If permitted, OpenAI’s restructuring would correspond a paradigm displacement for exertion startups; allowing this restructuring would only entice investors to motorboat organizations arsenic non-profits, cod hundreds of millions of dollars successful tax-free donations to support investigation and development, and past presume for-profit position arsenic its exertion becomes commercially viable.

Indeed, if OpenAI’s caller business exemplary is valid, non-profit investors would get the aforesaid for-profit upside arsenic those who put the accepted measurement successful for-profit companies while besides benefiting from taxation write-offs bestowed by the authorities and, ultimately, the public. That would distort the marketplace by fundamentally requiring immoderate startup seeking to stay competitory to adopt the aforesaid playbook. 

We understand that Elon Musk and Shivon Zilis are presently seeking to correspond the nationalist interests successful Musk v. Altman, No. 4:24-cv-04722-YGR (N.D. Cal.). Although we would besides impulse your agency to return nonstop action, we judge that Mr. Musk and Ms. Zilis are qualified and good positioned to correspond the interests of Californians successful this matter. Their early, foundational roles successful OpenAI’s creation and operations and arsenic anterior members of its Board position them to understand amended than anyone what OpenAI was intended to beryllium and really its existent behaviour deviates from its charitable mission.

Meta is committed to openness and transparency successful the transformative section of AI. OpenAI’s charitable committedness to create safe and broadly beneficial AI free from commercialized pressures is an important one, and it should beryllium kept. Given the breakneck velocity astatine which OpenAI is continuing its for-profit conversion, this is simply a typical lawsuit pinch an urgent necessity for action.

We admit your information of our views and are happy to reply immoderate questions you whitethorn have.

Respectfully,

Meta Platforms