Dear General Bonta:
As a California-based company that creates generative AI technology, Meta Platforms, Inc. (“Meta”) is deeply concerned about OpenAI’s attempt to erode the non-profit status under which it was founded in order to create a for-profit entity. We urge you to review this proposed transaction, including the nature and timing of any transfers of assets from OpenAI's non-profit entity to other entities. Failing to hold OpenAI accountable for its formation as a nonprofit could lead to a proliferation of similar start-up ventures that are ideologically charitable until potentially profitable. The people of California have a direct and immediate interest in stopping this behavior. All profitable activities of OpenAI and its related entities must be stopped to protect investors and consumers.
In 2015, OpenAI filed its original certificate of incorporation with the state of Delaware, which read:
This corporation shall be a nonprofit corporation organized exclusively for charitable and/or educational purposes within the meaning of section 501(c){3) of the Internal Revenue Code of 1986, as amended, or any future United States Law under the relevant provision of Internal Revenue. The specific purpose of this Corporation is to provide funding for the research, development, and distribution of technology relating to artificial intelligence… The Corporation is not organized for the private benefit of any person… The property of this Corporation is irrevocably dedicated to Is[se] Purpose… And no part of the net income or property of this Corporation shall ever be used for the benefit of any director, officer or member or for the benefit of any private person.
OpenAI reaffirmed this commitment years later on its own website:
With no clear path forward in the public sector and the success of other ambitious projects in private industry, [OpenAI] Bound by strong commitments towards the public good, it was decided to pursue this project through private means. [OpenAI] It was initially believed that a 501(c)(3) would be the most effective vehicle to guide the development of safe and broadly beneficial AGI while remaining free of profit incentives.
Taking advantage of this non-profit status, OpenAI raised billions of dollars in capital from investors to further its stated mission. The company told the state of California and the world that it would be run without any profit motivation. Investors and the public rightly relied on that assurance.
Now, OpenAI wants to change its position while maintaining all the advantages that have enabled it to get to where it is today. This is wrong. OpenAI should not be allowed to violate the law by taking and re-appropriating assets created as donations and potentially using them for huge personal gain.
Furthermore, the proposed transformation of OpenAI represents not only the future, but also the potential abuse of the corporate form. We would also urge you to examine whether OpenAI's past practices are consistent with its obligations as a nonprofit – in particular whether it inappropriately diverted the nonprofit's assets by distributing assets to third-party entities. Has been reduced from.
OpenAI's conduct could have a major impact on Silicon Valley. If allowed, the restructuring of OpenAI would represent a paradigm shift for technology startups; This restructuring would allow investors to simply launch organizations as non-profits, collect millions of dollars in tax-exempt donations to support research and development, and then turn for-profit once its technology is commercially viable. Will be attracted to assume the position.
In fact, if OpenAI's new business model is valid, nonprofit investors could benefit from the same benefits as traditional investors in profitable companies, plus they would benefit from tax write-offs provided by the government. will also benefit and ultimately, the public. This will inevitably require any startup wishing to remain competitive to adopt the same playbook thus distorting the market.
We understand that Elon Musk and Shivon Zilis currently seek to represent the public interest in Musk v. Altman, No. 4:24-cv-04722-YGR (N.D. Cal.). Although we would also urge your office to take direct action, we believe Mr. Musk and Ms. Zilis are qualified and well-positioned to represent the interests of Californians in this matter. Their early, foundational roles in the creation and operation of OpenAI and as former members of its board enable them to understand better than anyone what OpenAI was intended to be and how its current conduct deviates from its charitable mission.
Meta is committed to openness and transparency in the transformative field of AI. OpenAI's charitable promise to develop safe and broadly beneficial AI free from commercial pressures is an important one, and it must be kept. Given the breakneck pace at which OpenAI is continuing its profit-driven transformation, this is a special case in which action is urgently needed.
We appreciate your consideration of our ideas and will be happy to answer any questions you may have.
respectfully,
meta platform