Meta Urges California to Block OpenAI's For-Profit Conversion
Meta supports Elon Musk's legal effort to stop OpenAI from becoming a for-profit company, warning of major consequences for Silicon Valley.
Meta asks California Attorney General Rob Bonta to block OpenAI's plan to convert from a nonprofit to a for-profit company. The social media giant sends a letter arguing that this transition holds "seismic implications for Silicon Valley" and requests direct action from the state. Meta states that Elon Musk and former OpenAI board member Shivon Zilis are well-positioned to represent the interests of Californians in this dispute.
The company expresses concern about the fairness of OpenAI's proposed new business model. Meta argues that if the conversion proceeds, nonprofit investors receive the same financial upside as traditional for-profit investors while also benefiting from government tax write-offs. This creates an uneven playing field that potentially disrupts standard market practices in the technology sector.
This move aligns Meta with Musk's ongoing legal battle against the AI startup. Musk, an original OpenAI co-founder who now runs rival xAI, currently seeks an injunction to halt the transition. OpenAI responds to these legal challenges by publishing old messages from Musk and insists that he competes in the marketplace rather than the courtroom.