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Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

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Re: Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

#401

Post by cobertos »

emodendroket wrote: post #341
dkjaudyeqooe wrote: post #324

Earlier quoted context omitted.

The replies that say "well the profits go to the non-profit, all's good" miss the reality of these high profit nonprofits: the profits invariably end up in the pockets of management. Most of those are essentially scams, but it doesn't mean that OpenAI isn't just a more subtle scam. The hype and the credulity of the general public play right into this scam. People will more or less believe anything Sam the Money Gushi…

If your beef with this structure is that executives get paid handsomely I have bad news about the entire category of nonprofits, regardless of whether they have for-profit arms or not.

Not many people seem to understand this. Here's an example from a previous rabbit hole.

The Sherman Fairchild Foundation (which manages the post-humous funds of the guy who made Fairchild Semiconductor) pays its president $500k+ and chairman about the same. https://beta.candid.org/profile/6906786?keyword=Sherman+fair... (Click Form 990 and select a form)

I do love IRS Form 990 in this way. It sheds a lot of light into this.

Re: Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

#402

Post by lenerdenator »

pclmulqdq wrote: post #379
lenerdenator wrote: post #371

I'm not a lawyer, is it novel that someone's suing a corporate officer for breach of fiduciary duty as a result of trying to make the most money possible for shareholders? Obviously that's strange for a non-profit, but when you hear of a breach of fiduciary duty suit it's usually because someone didn't do something to make more money, not less. It almost feels more like an accusation of fraud than breach of duty.

This is not a for-profit company. The shareholders don't get any of the money that OpenAI makes by law, so its purpose is not to make a profit.

So Musk's arguing that they had duty to protect his investment in OpenAI from being used for profiteering, and they didn't do that.

How's that going to float in an industry whose philosophy is that profit is a very useful abstraction for social benefit?

Re: Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

#403

Post by [deleted] »

dragonwriter wrote: post #365
whimsicalism wrote: post #164

Earlier quoted context omitted.

If they are non-profit, they do not make billions in profits. I suspect you mean revenue :) Exec compensation is another thing, but also not a concern I am super sympathetic to given that for profit companies of similar magnitude generally pay their execs way more they just are not required to report it.

> If they are non-profit, they do not make billions in profits Wrong. Non-profits are not called that because they don't make profits, they are called that because they don’t return (even as a future claim) profits to private stakeholders.

[deleted]

Re: Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

#406

Post by threeseed »

pclmulqdq wrote: post #301
emodendroket wrote: post #270

Earlier quoted context omitted.

They didn't "turn it into" a for-profit though, they created a separate for-profit arm. This one is unusually successful but that's not an unusual thing for even "regular" charities to do in order to engage in some activities that they wouldn't normally be able to.

They basically did, though. The nonprofit does nothing except further the interests of the for-profit company, and all employees get shares of of the for-profit company. It's not unusual for nonprofits to have spinoffs, but it is unusual for the nonprofit to be so consumed by its for-profit spinoffs.

> The nonprofit does nothing except further the interests of the for-profit company, and all employees get shares of of the for-profit company

OpenAI has always argued that the for-profit is furthering the aims of the non-profit.

Also employees can't get shares of the non-profit so of course they would from the for-profit arm.

Re: Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

#407

Post by delfinom »

jimbokun wrote: post #100
thereisnoself wrote: post #27

Allowing startups to begin as non-profits for tax benefits, only to 'flip' into profit-seeking ventures is a moral hazard, IMO. It risks damaging public trust in the non-profit sector as a whole. This lawsuit is important

I live in Pittsburgh, and UPMC’s nonprofit status as they make billions in profits and pay their executives fortunes, is a running joke. With the hospitals and universities as the biggest employers and land owners here, a big chunk of the cities financial assets are exempt from contributing to the city budget.

In NYC, NYU and Columbia University are increasingly owning larger parts of Manhattan because they as universities have massive property tax exemptions. There is a big push right now to terminate those exemptions which currently amount to over $300 million per year.

At the same time they are getting these tax cuts, the CUNY public university system is struggling financially and getting budget cuts.

Re: Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

#408

Post by behringer »

emodendroket wrote: post #270
siliconc0w wrote: post #248

There is a lot in here but turning a non-profit into a for-profit definitely should be challenged. Otherwise why wouldn't everyone start as a non-profit, develop your IP, and then switch to 'for-profit' mode once you got something that works? You don't pay income taxes and your investors get write offs.

They didn't "turn it into" a for-profit though, they created a separate for-profit arm. This one is unusually successful but that's not an unusual thing for even "regular" charities to do in order to engage in some activities that they wouldn't normally be able to.

It should definitely be illegal.

Re: Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

#409

Post by rvba »

emodendroket wrote: post #341
dkjaudyeqooe wrote: post #324

Earlier quoted context omitted.

The replies that say "well the profits go to the non-profit, all's good" miss the reality of these high profit nonprofits: the profits invariably end up in the pockets of management. Most of those are essentially scams, but it doesn't mean that OpenAI isn't just a more subtle scam. The hype and the credulity of the general public play right into this scam. People will more or less believe anything Sam the Money Gushi…

If your beef with this structure is that executives get paid handsomely I have bad news about the entire category of nonprofits, regardless of whether they have for-profit arms or not.

The Mozilla management seems to be disinterested in doing anything to improve Firefox market share (by for example doing what users want: customization), they waste money on various "investments" and half-bake projects that are used by developers to stat-pad their CVs - and at the end of the day, they are paid millions.

IMO you could cut the CEOs salary from 6 million to 300k and get a new CEO - and we probably wouldnt see any difference in Firefox results. Perhaps improvement even. Since the poorly paid CEO would try to demonstrate value - and this best is done by bringing back firefox market share.

Re: Elon Musk sues Sam Altman, Greg Brockman, and OpenAI [pdf]

#410

Post by lotsofpulp »

pleasantpeasant wrote: post #316
jjjjj55555 wrote: post #296

Earlier quoted context omitted.

Isn't this how drugs get developed? Even worse, the research is done using public funds, and then privatized and commercialized later.

This is a huge problem in the US. Tax-payers are subsidizing a lot of medical advances, then the US government gives it to the private sector, privatizing whatever medical advances were paid by tax-dollars. Socialism seems to create a lot of markets for the Capitalist private sector.

> then the US government gives it to the private sector, privatizing whatever medical advances were paid by tax-dollars.

This should be changed to

“Then the US government fails to fund the billions of dollars required for medicinal trials needed to get FDA approval”

No one is stopping the US government from doing all the necessary work to verify the medicines work and put them in the public domain.

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