> transition to a Public Benefit Corporation
Can some business person give us a summary on PBCs vs. alternative registrations?
Evolving OpenAI's Structure
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Re: Evolving OpenAI's Structure
#12Here's a critical summary:
Key Structure Changes:
- Abandoning the "capped profit" model (which limited investor returns) in favor of traditional equity structure - Converting for-profit LLC to Public Benefit Corporation (PBC) - Nonprofit remains in control but also becomes a major shareholder
Reading Between the Lines:
1. Power Play: The "nonprofit control" messaging appears to be damage control following previous governance crises. Heavy emphasis on regulator involvement (CA/DE AGs) suggests this was likely not entirely voluntary.
2. Capital Structure Reality: They need "hundreds of billions to trillions" for compute. The capped-profit structure was clearly limiting their ability to raise capital at scale. This move enables unlimited upside for investors while maintaining the PR benefit of nonprofit oversight.
3. Governance Complexity: The "nonprofit controls PBC but is also major shareholder" structure creates interesting conflicts. Who controls the nonprofit? Who appoints its board? These details are conspicuously absent.
4. Competition Positioning: Multiple references to "democratic AI" vs "authoritarian AI" and "many great AGI companies" signal they're positioning against perceived centralized control (likely aimed at competitors).
Red Flags:
- Vague details about actual control mechanisms - No specifics on nonprofit board composition or appointment process - Heavy reliance on buzzwords ("democratic AI") without concrete governance details - Unclear what specific powers the nonprofit retains besides shareholding
This reads like a classic Silicon Valley power consolidation dressed up in altruistic language - enabling massive capital raising while maintaining insider control through a nonprofit structure whose own governance remains opaque.
Re: Evolving OpenAI's Structure
#13I think this is one of the most interesting lines as it basically directly implies that leadership thinks this won't be a winner take all market:
> Instead of our current complex capped-profit structure—which made sense when it looked like there might be one dominant AGI effort but doesn’t in a world of many great AGI companies—we are moving to a normal capital structure where everyone has stock. This is not a sale, but a change of structure to something simpler.
Re: Evolving OpenAI's Structure
#14OpenAI is busy rearranging the chairs while their competitors surpass them.
Re: Evolving OpenAI's Structure
#15"Instead of our current complex capped-profit structure—which made sense when it looked like there might be one dominant AGI effort but doesn’t in a world of many great AGI companies—we are moving to a normal capital structure where everyone has stock. This is not a sale, but a change of structure to something simpler."
OpenAI admitting that they're not going to win?
Re: Evolving OpenAI's Structure
#16Here's a critical summary: Key Structure Changes: - Abandoning the "capped profit" model (which limited investor returns) in favor of traditional equity structure - Converting for-profit LLC to Public Benefit Corporation (PBC) - Nonprofit remains in control but also becomes a major shareholder Reading Between the Lines: 1. Power Play: The "nonprofit control" messaging appears to be damage control following previous g…
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Re: Evolving OpenAI's Structure
#17OpenAI is busy rearranging the chairs while their competitors surpass them.
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Re: Evolving OpenAI's Structure
#18Huh, so Elon's lawsuit worked? The nonprofit will retain control? Or is this just spin on a plan that will eventually still sideline the nonprofit?
Re: Evolving OpenAI's Structure
#19> Our mission is to ensure that artificial general intelligence (AGI) benefits all of humanity.
Then why is it paywalled? Why are you making/have made people across the world sift through the worst material on offer by the wide uncensored Internet to train your LLMs? Why do you have a for-profit LLC operating under a non-profit, or for that matter, a "Public Benefit Corporation" that has to answer to shareholders at all?
Related to that:
> or the needs for hundreds of billions of dollars of compute to train models and serve users.
How does that serve humanity? Redirecting billions of dollars to fancy autocomplete who's power demands strain already struggling electrical grids and offset the gains of green energy worldwide?
> A lot of people around OpenAI in the early days thought AI should only be in the hands of a few trusted people who could “handle it”.
No, we thought your plagiarism machine was a disgusting abuse of the public square, and to be clear, this criticism would've been easily handled by simply requesting people opt-in to have their material used for AI training. But we all know why you didn't do that, don't we Sam.
> It will of course not be all used for good, but we trust humanity and think the good will outweigh the bad by orders of magnitude.
Well so far, we've got vulnerable, lonely people being scammed on Facebook, we've got companies charging subscriptions for people to sext their chatbots, we've got various states using it to target their opposition for military intervention, and the White House may have used it to draft the dumbest basis for a trade war in human history. Oh and fake therapists too.
When's the good kick in?
> We believe this is the best path forward—AGI should enable all of humanity^1 to benefit each other.
^1 who subscribe to our services
Re: Evolving OpenAI's Structure
#20I think this is one of the most interesting lines as it basically directly implies that leadership thinks this won't be a winner take all market: > Instead of our current complex capped-profit structure—which made sense when it looked like there might be one dominant AGI effort but doesn’t in a world of many great AGI companies—we are moving to a normal capital structure where everyone has stock. This is not a sale,…
Or they consider themselves to have low(er) chance of winning. They could think either, but they obviously can't say the latter.