One of the most controversial moves in recent years in the tech industry is OpenAI’s attempt to change its financial model. The artificial intelligence-focused company, which was born as a non-profit organization, wants to move to a for-profit model. Some prominent voices, such as Elon Musk, have spoken out against it. Now, Meta joins Musk and is even asking the US government to block the OpenAI switch to a for-profit company.
Meta sends letter to US government urging block of OpenAI switching to for-profit
OpenAI began its developments with donations from important figures, including Musk himself. Recently, the owner of X said that Sam Altman, OpenAI CEO, lied to him. Musk claims that he donated to the company with the idea that it would remain a non-profit organization. He has even attempted to file lawsuits against ChatGPT’s parent company. On the other hand, OpenAI claims that Musk had agreed with the change in financial model.
This week, Meta joined Musk’s cause by sending a letter to Bonta’s office. The document includes a mention of Musk, saying he is someone “qualified and well positioned to represent the interests of Californians in this matter.”
According to Meta, the US government should act on OpenAI’s financial model change. The letter says that OpenAI “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.”
The movement could lead to the birth of “false” non-profit organizations to get funds
The main argument of Mark Zuckerberg’s company is in the potentially “seismic implications for Silicon Valley.” Meta believes that, if OpenAI is successful, a wave of new companies will emerge trying to repeat the same movement. In other words, these companies could collect donations as non-profit entities, with the intention of transitioning into for-profit entities soon.
The movement could lead to “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,” the letter states.
OpenAI defends the financial model switch as necessary
Bret Taylor, OpenAI board chair, responded to the letter defending the model change. “While our work remains ongoing as we continue to consult independent financial and legal advisors, any potential restructuring would ensure 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.” Becoming a for-profit company will ensure that the company “is well-positioned to continue advancing its mission of ensuring AGI benefits all of humanity,” Taylor says.
OpenAI began raising funds this year by promising that it will successfully change its financial model within two years. In fact, if the firm doesn’t manage to do so, it will have to pay it back, with interest. We’re talking about billions of dollars in funding.
Meta launched its Llama 3.3 70B AI model this month
On the other hand, Meta has its own interests in this matter. The company is among the main names in the artificial intelligence segment. Meta AI is present on multiple of its social and messaging platforms. This month, Meta announced Llama 3.3 70B as its most advanced AI model to date.
