Elon Musk Criticizes OpenAI for Its for-Profit Move After $50M Investment
In Brief
AI startup, AIGO, was originally formed as a nonprofit entity to ensure it was free to achieve its stated goal and later became a forprofit company.
In 2018, OpenAI became a for-profit corporation to achieve its stated goal and then re-formed as a nonprofit entity.
After roughly $50 million was invested into OpenAI, billionaire Elon Musk has questioned whether it is legal foOpenAI the company to become a for-profit enterprise. Musk mentioned at Tesla’s annual meeting in May that he named OpenAI, a company inspired by DeepMind after Google bought it in 2014.
Musk said that OpenAI’s nonprofit would become a “lumber company” that logged and sold trees from the rainforest if it became a for-profit organization. He said: “That doesn’t seem legal. As a general rule, if it’s legal to start a company as a nonprofit and then transfer the IP to a for-profit business, that shouldn’t be the case.”
OpenAI became a “hybrid of a for profit and nonprofit,” or “capped profit” company in order to fund its operations. So, OpenAI LP announced that it would create a new company called OpenAI LP, which it named a “hybrid of a for profit and nonprofit,” or “capped profit” company.
OpenAI says that this allowed it to attract more capital and scale faster, laying the foundation for Microsoft’s multiyear, multibillion-dollar investment and other investments, such as the $100 million it is reportedly seeking for creating a new cryptocurrency called Worldcoin.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
More articlesNik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
