Meta Asks the US Government To Block OpenAI's Switch To a For-Profit 24
Meta is asking California Attorney General Rob Bonta to block OpenAI's planned transition from a non-profit to for-profit entity. From a report: In a letter sent to Bonta's office this week, Meta says that OpenAI "should not be allowed to flout the law by taking and reappropriating assets it built as a charity and using them for potentially enormous private gains."
The letter goes so far as to say that Meta believes Elon Musk is "qualified and well positioned to represent the interests of Californians in this matter." Meta supporting Musk's fight against OpenAI is notable given that Musk and Mark Zuckerberg were talking about literally fighting in a cage match just last year.
OpenAI started as a non-profit but stumbled into commercial success with ChatGPT, which now makes billions of dollars a year in revenue. CEO Sam Altman has been clear that the company needs to shed its non-profit status to become more attractive to investors and continuing funding its ambitions.
The letter goes so far as to say that Meta believes Elon Musk is "qualified and well positioned to represent the interests of Californians in this matter." Meta supporting Musk's fight against OpenAI is notable given that Musk and Mark Zuckerberg were talking about literally fighting in a cage match just last year.
OpenAI started as a non-profit but stumbled into commercial success with ChatGPT, which now makes billions of dollars a year in revenue. CEO Sam Altman has been clear that the company needs to shed its non-profit status to become more attractive to investors and continuing funding its ambitions.
alternatively... (Score:2)
how about we allow the transition, but OpenAI must accept (and pay in full), whatever the state determines is an appropriate amount of back taxes for their time as a "non-profit"
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The back taxes would probably be Zero since until this past year it's had no revenue.
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"As of December 2024, OpenAI has not yet achieved profitability. Despite generating substantial revenue, the company anticipates a loss of approximately $5 billion this year, primarily due to significant operational expenses, including computing infrastructure and talent acquisition."
I don't see this changing any time soon, even with a $200/month plan.
Re:alternatively... (Score:5, Interesting)
So in the usual way this is done, ForProfitAI would have to raise enough money to buy the assets from OpenAI to develop them, and you'd be required to have different representatives on both sides of the transaction. It's not impossible, but it would require billions of dollars in ForProfitAI to buy the assets of OpenAI at a fair market price. If they don't follow this process, they're open to major investigations from the IRS; the IRS takes this kind of thing very seriously.
I'm not saying it can't be done, but it's not easy to do given their size.
Re:alternatively... (Score:5, Informative)
ForProfitAI would have to raise enough money to buy the assets from OpenAI to develop them
There is a problem even with this. A 501c3 is prohibited from having any of its revenue, contributions, etc, inure to the private benefit.
If your ForProfitAI owned by your non-profit's managers are proposing to Pay $X for those assets, but that price is not high enough, and OtherCompany such as Meta would be willing to pay $X + 10 for those assets, Then your management would be committing an act of Self-dealing and thus conducting a prohibited transaction To simply sell it to ForProfitAI without making a clear effort to manage the sale appropriately and Find the best possible buyer (The buyer willing to conduct the purchase at the highest possible price)..
Meaning if you are wanting to divest your For profit by selling it, Then your management CANNOT make it so only their own company could buy it, as that would be a roundabout way of undervaluing and assigning public contributions to themself for their own benefit.
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Musk is actually the most cash rich of them all by far when it comes to ability to invest in new things. Because unlike others, he's proven to biggest investors on the planet that he can deliver significant profits through a variety of mechanisms where there seems to be none.
A good example is the supposedly massive loss leader of X purchase, where large percentage of money came from investors other than Musk. Who are all looking to make out like absolute bandits out of the deal on mix of things like prefere
Not unusual (Score:2)
Re:Not unusual (Score:5, Informative)
That's not the same as what they're trying to do. Non-profits are allowed to make money.
What they *aren't* allowed to do, is to sell ownership on a stock exchange . . . there's no huge going public exit for the founders of a non-profit.
The non-profit structure of groups like Mozilla, Signal, and Proton, keeps them from being acquired, not from making money. The board is answerable to a charter/mission statement, not to shareholders.
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That's not the same as what they're trying to do. Non-profits are allowed to make money.
Right, my point was aimed at peopel who think nonprofit means no profit.
What they *aren't* allowed to do, is to sell ownership on a stock exchange . . . there's no huge going public exit for the founders of a non-profit.
The non-profit structure of groups like Mozilla, Signal, and Proton, keeps them from being acquired, not from making money. The board is answerable to a charter/mission statement, not to shareholders.
In the end, it comes down to money. As a 401c, they could get tax free money to build their product, and sell 'ownership' on a private basis, such as to MS; but now that AI represents serious money people want to cash out.
Sorry Zuck (Score:2, Funny)
Trump already has Musk for a fluffer, you'll have to get in line.
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I don't know about your cabal, but mine is more concerned he's going to kill social security, worsen public education, and kill what's left of democracy in America.
You know, actual things that he's said he will do instead of vaguely menacing conspiracy theories.
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Whenever I hear someone chant this mantra, I wonder how much worse US public schools can get. You're already looking at people who can't properly read or do basic math and still "graduate" high school.
Granted they tend to be really on point on latest fads in furry anal sex and hating jews. But I suspect that most normal people would view better reading and math skills and worse furry anal sex and racism skills to be an improvement rather than worsening.
As for "kill what's left of our bureaucracy", it could
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"Granted they tend to be really on point on latest fads in furry anal sex and hating jews."
Wow, that is very concise dumb take. The younger generation doesn't "hate jews", they are critical of Israel since they havem't received the brainwashing about Israel as did the generations previous, especially now that IDF soldiers are proudly liveatreaming the genocide as they commit it--and Israelis seem to love it.
The equation of Israel to "the Jews" would have been considered an anti-semitic slur only a few decad
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I love how this point always triggers Woke crowd. Because they don't even know of that massive amount of hate crime of specific demographic that is massively overrepresented "graduating high school" without being able to read and write is also the one targeting Jews for unironic hate crime that has existed long before the current conflict. Hint: the popular belief is that Jews in US control the White Man who in turn oppresses them. How did that belief get born and spread?
It's taught. In a targeted manner.
In
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Nope, it's not about being woke. The divide on public opinion for supporting Israel is not left and right, it is young and old. Go read ADL head's Jonathan Greenblatt's admission of such in a leaked recording. There is a contingent of right wing thought that bristles at how many Christians are being brutally murdered there too. You seem to be on the right but you're oblivious to this.
"has existed long before the current conflict"
Wrong. The current campaign for the last year was to bomb and starve two millio
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The enemy of my enemy... (Score:2)
I'm looking forward to the renewed challenges to a cage-fight match soon! That's if Musk's not too busy appearing in the 2nd season of "The Trumps."
Tech owners are incredibly hateable (Score:5, Insightful)
Everything they do is self-serving and arrogant. Bexos, Musk, Altman, Zuck, et al. - the have all the resources in the world and simply choose the path leading the world into a dystopian, rotten, wasteland.
It really is an era of zero ethics. And the latest election just empowers all of these assholes to be their worst self.
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One recently posted
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Insurance companies, like any company, have a duty to shareholders to maximize profits, no matter how ruthlessly.
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and then subsequently deleted the post.
Legally this argument is sound.
Socially it's sociopathic.
The Legal System, as constructed, drives sociopathy.
The most successful businessmen run "perfectly legal" companies.
It's normal to dislike such humans.
Several Things Wrong (Score:3)
The title "Meta Asks the US Government To Block OpenAI's Switch To a For-Profit" is misleading. California Attorney General Rob Bonta Rob Bonta is a state official and not part of the U.S. government. By law, the California Attorney General is the "super trustee" of all non-profits incorporated in California.
More than once in the past, a California non-profit has converted to for-profit. The largest was likely California Blue Cross, which converted in 1996 and became WellPoint.
The conversion of the System Development Corporation (SDC) in the 1970s -- where I was employed at the time -- provides a road map. Renaming itself the System Development Foundation (SDF), it incorporated a wholly owned for-profit subsidiary that acquired all of the old SDC's assets including the name System Development Corporation. SDF tried to dispose of for-profit SDC three times. Attempting public sales twice failed when general stock market conditions turned sour. A third attempt was blocked by the California Attorney General because the investment banker that advised the old SDC on how to convert was going to bring the new SDC to the public, which was a conflict of interest. Eventually, SDF sold its SDC subsidiary to the Burroughs Corporation in 1980. SDF used the money it received for grants to universities and other non-profits.