Executives at OpenAI are reportedly considering moving the company out of California amid mounting political pushback that could jeopardize its transition from a nonprofit to a for-profit organization, The WSJ reports. However, OpenAI maintains that it currently has no intention of relocating.
The attorney general of California is examining whether OpenAI’s organizational changes may breach state laws regarding charitable trusts. Simultaneously, a group consisting of nonprofits, labor organizations, philanthropic entities, and competitor Meta are actively opposing the shift. OpenAI’s restructuring is linked to approximately $19 billion in investments—failure to complete the conversion could prompt investors to withdraw, posing a severe threat to the company behind ChatGPT.
A relocation would be particularly surprising considering CEO Sam Altman’s strong personal and professional connections to the Bay Area. Altman was part of San Francisco Mayor Daniel Lurie’s transition team following Lurie’s election last year, and is said to own several properties in San Francisco as well as one in Napa Valley. Relocating would also be a significant logistical hurdle, as most of OpenAI’s AI experts are based in San Francisco.
OpenAI is still coordinating with attorneys general from both California and Delaware regarding the restructuring process. Meanwhile, the ongoing regulatory scrutiny adds to the company’s difficulties, including the intensifying competition for top AI talent.
