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 acrophobic astir OpenAI’s effort to shed the non-profit presumption 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 signifier arsenic a non-profit could pb 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 support investors and consumers alike.

In 2015, OpenAI filed its archetypal certificate of incorporation with 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, oregon the corresponding proviso of immoderate aboriginal United States Internal Revenue law. The circumstantial intent of this corp is to supply backing for research, improvement and organisation 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 oregon assets of this corp shall ever inure to the payment of immoderate director, serviceman oregon subordinate thereof oregon to the payment of immoderate backstage person.

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

Seeing nary wide way successful the nationalist sector, and fixed the occurrence of different ambitious projects successful backstage industry, [OpenAI] decided to prosecute this task done backstage means bound by beardown commitments to the nationalist good. [OpenAI] initially believed a 501(c)(3) would beryllium the astir effectual conveyance to nonstop the improvement of harmless and broadly beneficial AGI portion remaining unencumbered by nett incentives.

Taking vantage 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 satellite that it would beryllium tally without immoderate nett motivation. Investors and the nationalist rightfully relied connected that assurance. 

Now, OpenAI wants to alteration its presumption portion 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 instrumentality by taking and reappropriating assets it built arsenic a foundation 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 with 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 lone entice investors to motorboat organizations arsenic non-profits, cod hundreds of millions of dollars successful tax-free donations to enactment probe and development, and past presume for-profit presumption arsenic its exertion becomes commercially viable.

Indeed, if OpenAI’s caller concern exemplary is valid, non-profit investors would get the aforesaid for-profit upside arsenic those who put the accepted mode successful for-profit companies portion 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 follow the aforesaid playbook. 

We recognize 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 bureau to instrumentality 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 instauration and operations and arsenic anterior members of its Board presumption them to recognize amended than anyone what OpenAI was intended to beryllium and however its existent behaviour deviates from its charitable mission.

Meta is committed to openness and transparency successful the transformative tract of AI. OpenAI’s charitable committedness to make harmless and broadly beneficial AI escaped 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 peculiar lawsuit with an urgent necessity for action.

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

Respectfully,

Meta Platforms