Legal rulings, official announcements from involved parties

Meta and Elon Musk Challenge OpenAI's $6.6 Billion For-Profit Transition Amid Microsoft's Investment

Dec 17, 2024, 04:44 PM

Meta Platforms Inc. and Elon Musk have joined forces in an effort to block OpenAI's transition from a nonprofit to a for-profit company. Meta has written to California Attorney General Rob Bonta, arguing that allowing OpenAI to convert would set a dangerous precedent for other startups. OpenAI's proposed transition involves maintaining a nonprofit arm that would receive full value from its ownership stake in the new for-profit entity. This move is seen as a response to the company's need for significant funding, including a recent $6.6 billion funding round, to continue its operations. OpenAI has promised investors a two-year schedule for this transition. Musk, who has filed an injunction against OpenAI, is also challenging the transition, citing concerns over the company's deviation from its original nonprofit mission. Meta's opposition is partly driven by its competition with OpenAI in the development of large language models, and its concerns about the broader implications for Silicon Valley if such transitions become commonplace. Additionally, Microsoft's investment in OpenAI is a significant factor in the company's strategic shift.