In This Article:
The non-profit arm of OpenAI — which Microsoft (MSFT) reportedly holds a 49% stake in — has retained control over the artificial intelligence developer and its for-profit business. But is this enough to satisfy co-founder Elon Musk and his initial criticisms of the pivot?
Yahoo Finance legal correspondent Alexis Keenan outlines OpenAI's current restructuring and Musk's feud with fellow co-founder and CEO Sam Altman.
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OpenAI's new restructuring plan remains a point of contention for Elon Musk as his legal claims against the creator of chat GPT move forward. Yahoo! Finance's Alexis Keenan joins us now with the latest. So, OpenAI, as we know, has a complex structure.
Yes.
And the structure was set to change. Elon Musk challenged that.
In a lawsuit.
In a lawsuit, and then OpenAI said, well, we're going to do a different thing.
Maybe not. We're going to backtrack a little bit. We're going to stay a nonprofit. OpenAI at the top of the pyramid, being the parent company of a for-profit company in which Microsoft and others are invested. Uh, that is going to turn into that that subsidiary. That's going to turn into a public benefit corporation, which is still essentially a for-profit business. But in a lawsuit, in that lawsuit, you mentioned that Musk has ongoing against OpenAI, Altman, other executives, and Microsoft, Musk said this about this about face. He said, "By all indications, OpenAI's latest announcement is a facade concealing OpenAI's prior looting of the charity and ongoing profiteering from it." He went on to criticize OpenAI's removal of for-profit caps that are in place with the nonprofit that, uh, is put on outside investors. So that is going to go away according to this announcement. OpenAI has, for its part, responded and said that the continuing case, they call it baseless by Elon Musk, the lawsuit, saying it only provides and proves that it was always a bad faith attempt to slow down OpenAI's progress. Now, it's unclear to me how this change, how this entity change, is going to impact competition. You guys were just talking a lot about Google's advancements in this space. Uh, you have Apple already using chat GPT owned by OpenAI for its Apple intelligence features on its mobile devices. You had Eddie Cue, head of services for Apple, testifying in Google's search remedies trial this week, saying that Apple is also considering not only chat GPT, but also perplexity, which is a corporation, by the way, and Anthropic, which is a public benefit corporation. All of those in the mix as potential search possibilities for Apple. Uh, so, you know, you have all these different types of entities in the mix, and what that does when you extrapolate out and go into the future and test these companies against each other, I don't know. You also had an open letter that came right before this about face that was signed by technology experts, including some what some people call the Godfather, who some people call the Godfather of AI, Jeffrey Hinton, AI pioneer, also Lawrence Lessig, Harvard law professor, uh, saying that OpenAI should remain a nonprofit. So what exactly they think about this new idea?
Don't know.
Has Microsoft weighed in yet, Alexis, on this new OpenAI structure? Do we know?
I don't think so. I haven't seen that. Um, the the open letter from these experts said that OpenAI wasn't organized for this purpose, and their concern, of course, is that any for-profit structure is going to harm potentially humanity when the robots take over. Um, so there's a lot of debate here still to come, I think, and regulators so far haven't truly weighed in, but there was some pressure from attorneys general on OpenAI to keep their structure in place as well.
