Kenne Michael 
Elon Musk criticizes OpenAI’s for-profit pivot after investing $50 million.
Elon Musk has questioned whether it is lawful for OpenAI, the company behind ChatGPT, to become a for-profit enterprise after investing approximately $50 million in the company.
Musk told CNBC on May 16 during Tesla’s annual shareholder meeting that he “came up with the name” OpenAI, intending the company to be an open-source alternative to DeepMind following Google’s 2014 acquisition.
Musk compared OpenAI’s transition from nonprofit to for-profit to a “save the Amazon” organization transforming into a “lumber company” that harvested and sold rainforest trees, adding:
“Is that legal? That doesn’t seem legal. In general, if it is legal to start a company as a non-profit and then take the IP and transfer it to a for-profit that then makes tons of money […] shouldn’t that be the default?”
OpenAI states that it was founded as a nonprofit to pursue its mission of advancing “digital intelligence in a way that is most likely to benefit humanity as a whole” without being constrained by the need to generate a financial return.
OpenAI announced in 2019 that it would establish a new company called OpenAI LP, which it described as a “hybrid of a for-profit and nonprofit” or “capped-profit” company that is presumably still governed by the nonprofit organization.
OpenAI was created as an open source (which is why I named it “Open” AI), non-profit company to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft.
Not what I intended at all.
— Elon Musk (@elonmusk) February 17, 2023
OpenAI asserts that this enabled it to attract more capital and scale more quickly, paving the way for Microsoft’s multiyear, multibillion-dollar investment and other investments, such as the $100 million it is reportedly seeking to create a new cryptocurrency called Worldcoin.
OpenAI could release an open-source AI model for the first time since turning for-profit in 2019.
Given that this is a significant source of revenue for the company, the open-source AI model may not be as competitive as the paid version, which costs $20 per month.
