(Reuters) – Meta Platforms (NASDAQ:META) is urging California’s attorney general to block OpenAI’s planned conversion to a for-profit company, the Wall Street Journal reported on Friday.
In a letter to Attorney General Rob Bonta dated Thursday, Meta said that allowing OpenAI to become a for-profit company would set a dangerous precedent of allowing startups to enjoy the advantages of nonprofit status until they are poised to become profitable, WSJ reported.
“OpenAI’s conduct could have seismic implications for Silicon Valley. If OpenAI’s new business model is valid, non-profit investors would get the same for-profit upside as those who invest the conventional way in for-profit companies while also benefiting from tax write-offs bestowed by the government,” the WSJ report quotes Meta as saying in the letter.