California Attorney General Rob Bonta is facing mounting pressure from prominent nonprofits to intervene in the escalating legal battle with OpenAI, which could lead to an unexpected alliance with tech mogul Elon Musk.
The push for action comes amid the intensifying conflict between Musk and his former associate Sam Altman, as they spar over OpenAI’s transition to a for-profit entity.
Legal Investigation and Potential Alliances
While Bonta’s office is already investigating OpenAI’s shift to a for-profit model, the possibility of delving deeper into the legal confrontation could align them with Musk, who has taken the company to court to block its conversion. In response, OpenAI has countersued Musk, escalating the legal drama.
The prospect of collaboration between Musk and Bonta may seem unlikely, given the attorney general’s role in challenging the Trump administration and defending California’s social media regulations against Musk’s legal challenges.
Call for Action from Nonprofit Leaders
A coalition of nonprofit leaders, including representatives from the San Francisco Foundation, Economic Security Project, and labor organizations, has urged Bonta to ensure that OpenAI’s charitable assets are transferred to independent nonprofit entities. The focus is on preserving assets intended for public benefit as the company transitions.
Referencing past interventions by the attorney general’s office in similar cases, the coalition emphasizes the importance of safeguarding OpenAI’s substantial valuation as charitable assets for societal good.
OpenAI’s Response and Ongoing Legal Battles
OpenAI has reiterated its commitment to strengthening its nonprofit arm for long-term impact, emphasizing its intention to retain and enhance its charitable mission. The company plans to incorporate its nonprofit parent as a shareholder in the new for-profit venture, with oversight mechanisms in place for asset distribution.
Despite efforts to engage with the nonprofit leaders and address their concerns, tensions persist as OpenAI contests Musk’s claims and accuses him of undermining its progress to advance his own AI initiatives.
Legal Implications and Future Directions
The legal dispute not only raises questions about the allocation of OpenAI’s substantial valuation as nonprofit assets but also underscores the broader implications of its funding arrangements. The company’s agreement to return a significant portion of its recent funding if the for-profit transition fails adds a layer of complexity to the situation.
As discussions unfold with regulators and legal experts, including potential involvement from the Delaware attorney general’s office, the stakes remain high for all parties involved in the dispute.
Stay informed on developments in this evolving story by subscribing to POLITICO’s California Decoded newsletter for in-depth analysis of tech policy and legal battles shaping the industry.
