SAN FRANCISCO (KRON) — Leadership at one of San Francisco’s top artificial intelligence startups is reportedly discussing the possibility of leaving California amid mounting scrutiny from state regulators. Executives at OpenAI, the company behind ChatGPT, have floated a “last-ditch” option of leaving the state following regulatory setbacks in the startup’s efforts to become a for-profit company, the Wall Street Journal is reporting.
OpenAI, lead by CEO and founder Sam Altman, is being investigated by the attorneys general in California and Delaware over its plan to transition from a nonprofit. According to the WSJ, the startups financial backers have conditioned some $19 billion in funding on receiving shares in a restructured for-profit OpenAI.
Loss of that funding, nearly half what the startup has received over the past year, could reportedly hamper the leading AI startup’s growth and ability to remain on the cutting edge of AI.
An OpenAI spokesperson cited by the Journal has denied the company has plans to leave California. However, the Journal also cites people familiar with the matter who said OpenAI executives did not expect the intense public backlash to the restructuring.
Those same people told the Journal that OpenAI leadership has discussed leaving the state as a last resort if the state AG complicates the restructuring.
Such a move would come as a big blow to San Francisco’s nascent artificial intelligence industry. The city is home to several leading AI startups including OpenAI, Anthropic, and Perplexity among others. Former San Francisco Mayor London Breed declared SF the “AI Capital of the World,” and her successor, Mayor Daniel Lurie, has called the city “the global home of AI.”
Leaving California would present a logistical challenge for OpenAI, with most of its AI researchers concentrated in San Francisco.
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