OpenAI has been on a “Shipmas” product launch spree, launching its highly-awaited Sora video generator and onboarding millions of Apple ecosystem members with the Siri-ChatGPT integration. The company has also expanded its subscription portfolio as it races toward a for-profit status, which is reportedly a hot topic of debate internally.
Not everyone is happy with the AI behemoth abandoning its nonprofit roots, including one of its founding fathers and now rival, Elon Musk. The xAI chief filed a lawsuit against OpenAI earlier this year and has also been consistently taking potshots at the company.
“You can’t sue your way to AGI.”
Now, the Microsoft-backed company has published a trove of emails and conversations between Musk and OpenAI executives with quite a stunning claim. It was Musk, all along, who was allegedly chasing a for-profit status and sought the CEO role, absolute control, a merger with Tesla, and a majority equity.
A few core OpenAI executives were also enthusiastic about a hybrid plan where a research division would function as a nonprofit alongside a for-profit wing exploring hardware partnerships.
As the involved parties explored a for-profit arm, Musk wrote to the top OpenAI executives that he “would unequivocally have initial control of the company,” subject to change in the near future. OpenAI rejected Musk’s demands, and he eventually left, subsequently starting his own company called xAI.
“He should be competing in the marketplace rather than the courtroom.”
“The current structure provides you with a path where you end up with unilateral absolute control over the AGI,” former OpenAI chief scientist Ilya Sutskever wrote to Musk in an email chain. “You stated that you don’t want to control the final AGI, but during this negotiation, you’ve shown to us that absolute control is extremely important to you.”
OpenAI eventually established the capped-profit OpenAI LP entity and claims to have reached out to Musk on multiple occasions with an equity offering, but he declined. But it seems that Musk is not the only party unhappy with OpenAI inching toward a for-profit structure.
Meta is miffed
Meta has reportedly written a letter to California Attorney General Rob Bonta, asking for a block on OpenAI’s pursuit of transforming into a nonprofit company. The letter, which was first reported by The Wall Street Journal, notes that OpenAI initially gathered funding as it promoted a charitable mission and now wants to amass profits.
The Mark Zuckerberg-led company has asked the attorney general to not only stop OpenAI’s transformation, but also urgently look into its obligations as a nonprofit in the context of activities like “distributing assets to third-party entities.”
“That is wrong.”
Meta’s core argument is that OpenAI sets a dangerous precedent where a non-profit gets a fat sum in donations, builds a product or service, and then abandons its charitable roots to seek profits down the road. Of course, the social giant is also competing against OpenAI with its own Meta AI stack, so there’s that.
Interestingly, Meta’s letter namedrops Musk, noting that he is “qualified and well positioned to represent the interests of Californians in this matter.” Notably, Musk hasn’t been a fan of Zuckerberg lately, and until a few months ago, the two were butting heads and goading each other in a cage fight.
The fight never happened. It would be interesting to see whether OpenAI faces any legal heat in its for-profit while working closely with Microsoft.
