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OpenAI’s promise to stay in California helped clear the path for its IPO

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Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#111

Post by vessenes »

alfalfasprout wrote: post #102
brokencode wrote: post #99

Earlier quoted context omitted.

Sure, but most of the country’s AI talent is concentrated there. Not to mention venture capital. What’s the advantage of moving? Maybe lower taxes and a cheaper rent. That seems like a small price to pay compared to the hundreds of billions they’re putting into data centers.

They're concentrated there because they've been asked to concentrate there. That can change on a dime. It's not like data centers are mainly in SF.

I think you're wrong. The concentration is for a host of reasons. Witness the large number of cities and countries that have tried to create a local Silicon Valley competitor unsuccessfully over the last 25 years.

The data centers I think prove this point, and disprove yours -- huge spend has gone into data centers, but places like Wenatchee remain stubbornly not Silicon Valley.

Intel has not made Portland into SV. Austin, while a tech hub and one of the US supply chain centers for hardware, is multiple orders of magnitude less productive than SV for tech startups. Productive as in numbers of unicorns, total value creation, however you want to spin it.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#112

Post by BobaFloutist »

JumpCrisscross wrote: post #90
hodder wrote: post #66

Can someone explain to me why California would believe Sam Altman plans to stay in California? This is a weak handshake agreement that could easily be flipped post IPO. The very flip from non-profit to IPO shows he will do what it takes for OpenAI to "succeed", so why would the geographical location be any more permanent than corporate structure. This isnt a diss to Sam either, it just shows he is motivated by whatev…

> Can someone explain to me why California would believe Sam Altman plans to stay in California? The simple answer is unless developing LLMs becomes commoditised, the best place in the world to do it is in San Francisco. You don't take your manufacturing business out of Shenzhen without very good reason.

That still doesn't explain the value of Sam Altman's pinky promise.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#113

Post by vessenes »

afavour wrote: post #109
yellow_postit wrote: post #100

Earlier quoted context omitted.

The Texas Stock Exchange launches next year and I predict we will see a lot of tech try to move to launch there given txse claim to have lower compliance and less esg needs.

It’s frauds all the way down

downvoted -- this is a low quality comment, and worse, it's uninformed. Texas may be lower reg than NASDAQ at launch, and it may compete for business that way, and consumers may or may not like this and may or may not benefit from it.

However, post Sarbox US is vastly more regulated than the markets that "built" Silicon Valley, and there are many costs to corporations, founders and employees of that heavier regulation -- including a radically less friendly public capital market for companies worth hundreds of millions of dollars.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#114

Post by thaumaturgy »

jameslk wrote: post #11

TFA: > OpenAI had spent months making the case that it was the economic heart of the California economy—and would be willing to leave if Bonta blocked its plan to convert to a simpler corporate structure. https://x.com/sama/status/1983223056668746218 : > California is my home, and I love it here, and when I talked to Attorney General Bonta two weeks ago I made clear that we were not going to do what those other compa…

OpenAI announced $10 billion ARR in June of this year (https://www.cnbc.com/2025/06/09/openai-hits-10-billion-in-an...).

Agriculture in California hit $61 billion in annual receipts in 2024 (https://www.cdfa.ca.gov/statistics/).

So, not that OpenAI isn't big, but, "the heart of the California economy"?

OpenAI needs to IPO, because if they don't get in on the current meme stock economy, they're going to collapse.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#115

Post by vessenes »

fourseventy wrote: post #17

How can a non-profit IPO? I know that technically OpenAI is a for-profit company that is owned by a non-profit, but I still don't get it.

There's so, so much misinformation about this out there.

For example - every US nonprofit starts as a plain old vanilla C corporation, and then applies for 501(c)3 status which the IRS may or may not grant. It's a privilege to be a nonprofit.

The punishment that may be levied on a nonprofit is ... loss of that status and a return to a commercial corporation. That loss of status might have knock-on impacts on things like, say, tax deductions offered to donors, and I guess possibly on corporate income tax to the extent a company's accounting shows a profit. But it's not a thing you're "locked into" somehow and trying to escape. Quite the opposite; it's a thing the Federal government chooses to support financially as a matter of public policy.

oAI had a lot of work to do to get recapitalized like it did, but it was not the non-profit status that was the (major) problem. It was (at the least) the investment covenants made with the Microsofts of the world that bound them; the MS deal was the big thing here.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#116

Post by everfrustrated »

yellow_postit wrote: post #100
JumpCrisscross wrote: post #90

Earlier quoted context omitted.

> Can someone explain to me why California would believe Sam Altman plans to stay in California? The simple answer is unless developing LLMs becomes commoditised, the best place in the world to do it is in San Francisco. You don't take your manufacturing business out of Shenzhen without very good reason.

The Texas Stock Exchange launches next year and I predict we will see a lot of tech try to move to launch there given txse claim to have lower compliance and less esg needs.

I learned recently that Nasdaq imposes DEI on companies as a requirement of listing.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#117

Post by lukebechtel »

khazhoux wrote: post #107

I don’t understand the animus towards OAI going public. ChatGPT undoubtedly changed the world. The non->for profit status of the company is not impacting anyone. It’s not like their success was made possible by being a non-profit. Suddenly everyone here is very very concerned with the classification of this corporate entity, and I detect people feel personally slighted. Why is that?

Because the development of this technology was originally done under a certain set of promises ostensibly intended to prevent pure capitalist profitmaxxing.

The workers and supporters who were taken by this idealistic vision, believe it was a bait-and-switch, and that the original promises were never intended to be kept.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#118

Post by vessenes »

khazhoux wrote: post #107

I don’t understand the animus towards OAI going public. ChatGPT undoubtedly changed the world. The non->for profit status of the company is not impacting anyone. It’s not like their success was made possible by being a non-profit. Suddenly everyone here is very very concerned with the classification of this corporate entity, and I detect people feel personally slighted. Why is that?

They are chronically online and reading uninformed headlines by fellow youth.

Combined with a feeling that they don't like this wave of GenAI, you get a lot of uninformed hate that's deeply felt, and probably reasonably felt. But also totally uninformed.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#119

Post by rottencupcakes »

khazhoux wrote: post #107

I don’t understand the animus towards OAI going public. ChatGPT undoubtedly changed the world. The non->for profit status of the company is not impacting anyone. It’s not like their success was made possible by being a non-profit. Suddenly everyone here is very very concerned with the classification of this corporate entity, and I detect people feel personally slighted. Why is that?

They founded OpenAI on the explicit premise that advanced AI poses existential risks to humanity, and that a non profit structure was essential to prioritize safety over profits. They reaped major benefits from this status, including tax exemptions, easier talent recruitment (by appealing to mission-driven researchers), and massive donations.

Then, once GPT models exploded in value, making the for-profit arm worth tens of billions, they attempted to restructure toward a public company model to let investors and insiders cash out at scale, while claiming the non-profit board would still "control" the direction. This directly contradicts their original charter, which warned that profit motives could lead to unsafe AI racing.

Now it is clear that we are nowhere near AGI, and hence they have to make money from making fake tiktok videos and smut. And they just want to cash out because the original premise won't deliver. Specifically it was very disingenuous and that is why people hate it.

Re: OpenAI’s promise to stay in California helped clear the path for its IPO

#120

Post by NickC25 »

JumpCrisscross wrote: post #27
hrimfaxi wrote: post #16

Earlier quoted context omitted.

Corporations exist at the pleasure of government do they not? They are not some naturally-existing thing.

> Corporations exist at the pleasure of government do they not? No. “At the pleasure of” means total discretion. The government can’t just stop letting businesses incorporate because it doesn’t like how a county voted.

>The government can’t just stop letting businesses incorporate because it doesn’t like how a county voted.

The government can revoke a corporation's charter at any time it desires to.

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