Elon Musk Battles OpenAI Over Move To For-Profit Model — And Experts Are Pushing Back

OpenAI, the artificial intelligence research lab, is under fire for its plans to transition from a non-profit to a for-profit business.

What Happened: The move has been met with opposition from various quarters, including Elon Musk, who argue that it could have significant implications for the control of AI technology. OpenAI’s CEO, Sam Altman, intends to separate the company’s revenue-generating business from its non-profit parent organization.

The aim is to create a more traditional company that can attract investments and provide returns to shareholders.

According to the report by Insider, the proposal has stirred controversy due to OpenAI’s intricate corporate structure, the billions it has already amassed from investors, and Elon Musk’s efforts to thwart the deal. Critics, including entrepreneurs, investors, academics, and activists, contend that OpenAI could be making a serious error.

Jungwon Byun, co-founder of AI lab Ought, which underwent a similar transition, cautioned against the move. “Artificial general intelligence is the most transformative technology of our lifetime… giving up governance rights to controlling the most important technology of our lifetime is an insanely huge decision and will affect all of humanity at a very great scale for a long time,” she told the outlet.

Also Read: Elon Musk Is Feuding With Sam Altman In A Major Lawsuit Over OpenAI — And One Appears To Already Have The Upper Hand

OpenAI was founded as a non-profit in 2015, but its need for capital to fund AI development led it to establish a for-profit subsidiary. The company now aims to transition to a more conventional corporate structure, turning the for-profit subsidiary into an independent public benefit company that oversees “OpenAI’s operations and business.”

Elon Musk, an OpenAI co-founder who parted ways with Altman, has taken legal action against the startup over its plans. Musk and a group of other investors also made a bid in February to acquire the non-profit parent OpenAI Inc. for $97.4 billion, more than half of the total value of the entire startup based on its most recent funding round.

The OpenAI board, led by Bret Taylor and including Altman, Fidji Simo, Larry Summers, and other business luminaries, has dismissed Musk’s bid. “OpenAI is not for sale, and the board has unanimously rejected Mr. Musk’s latest attempt to disrupt his competition,” Taylor stated.

The attorneys general of California and Delaware are both investigating the specifics of the transition, adding another layer of complexity to OpenAI’s plans.

Why It Matters: The transition of OpenAI from a non-profit to a for-profit entity is a significant move that could have far-reaching implications for the control of AI technology.

The controversy surrounding the decision underscores the challenges that such organizations face when they seek to balance the need for capital with their mission to serve the public good.

The outcome of this situation could set a precedent for other AI research labs considering similar transitions in the future.

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