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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

#181

Post by rhetocj23 »

JumpCrisscross wrote: post #97
kelipso wrote: post #49

Earlier quoted context omitted.

This is the guy who had everyone here rooting for him when the OpenAI board tried to kick him out. Which was almost certainly the result of a very successful PR campaign carried out by him. He's not really comparable with Jobs. This guy is a politician and Jobs was a product guy.

> This guy is a politician and Jobs was a product guy They're both excellent marketers.

Not at all. When people say this statement about Jobs, it tells me how little they know about the man.

S Jobs was a clinical and clear communicator. Altman in comparison? Lmao.

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

#182

Post by cma »

tedd4u wrote: post #165
cma wrote: post #146

Earlier quoted context omitted.

Not if the big holders aren't residents, they can move away just before like Rogan with his Spotify deal, or Jonathan Blow just before a game release after developing in California and going to public college there, etc. Since it's a non-profit still holding it any gains to the non-profit entity upon the conversion don't go to California, and principal stakeholders can move away. Other funds raised from the IPO can b…

I'd recommend anyone expecting to profit from OpenAI stock and aiming to avoid California taxes to look into the subject in depth with paid advisors. The California FTB is not stupid or naïve and has a history of successfully getting paid for stock that vested with a California nexus, even if the beneficiary moves out of state. Good luck!

You're right, it's harder with vesting stock compensation than other things you build up over time like an audience or a developing a game over a long span.

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

#183

Post by terminalshort »

hrimfaxi wrote: post #58
JumpCrisscross wrote: post #27

Earlier quoted context omitted.

> 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.

Why can't the government do that? Is it because the government created laws that limited its total discretion? That is besides my point. The people allow for corporations to exist is what I was getting at, and in the US businesses incorporate at the state level. So asking why California has a say in the structure of a company incorporated in it seemed odd to me on its face.

> Is it because the government created laws that limited its total discretion?

Yes. As you said, "the people allow for corporations to exist," and the same people created the government and allow it to exist. And when those people created that government they created rules that govern what laws the government is allowed to enact. Those rules are known as the constitution. And one of the first rules the people made when they created the government is the aptly named "first amendment." And that rule clearly states that the government can't take legal action against a citizen for saying something the government doesn't like. The CA government retaliating against OpenAI for its CEO threatening to leave the state would clearly violate this rule.

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

#184

Post by linuxftw »

andy99 wrote: post #172

IPO is to leave someone holding the bag, right? The narrative has really changed from AGI, the most consequential technology, blabla. If I had that I would keep it private. If I wanted to cash out, I’d do an IPO. Is there a narrative that doesn’t make it seem like pump and dump?

In the before times, companies went public to raise capital in order to grow their business.

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

#185

Post by int_19h »

cosmicgadget wrote: post #86
harmmonica wrote: post #84

Earlier quoted context omitted.

If they're still based in CA when they IPO at least those initial taxes will be collectible in state (assuming they're structured in a way where the IPO is a taxable event for the leadership and staff). Pretty sure the taxes collected from OpenAI will be the single biggest IPO tax windfall ever (correct me if I'm wrong, but I can't think of a bigger one).

We're finally going to get that bullet train.

Yeah, but it'll be run by ChatGPT. ~

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

#186

Post by laluser »

nmfisher wrote: post #173
laluser wrote: post #163

Earlier quoted context omitted.

Look at all the companies that have 'burned cash' with no viable path to profitability over the last 20 years. The good ones outlive that criticism, easily. Think Uber, etc. They clearly see a path to profitability and they have plenty of room to experiment here with what works. With new partnerships and dependencies, they won't run out of cash for a long time.

I don’t know the exact numbers, but I feel like OpenAI raised far more money than those companies, burned through it far quicker and has much more competition with a much shakier value proposition. They definitely have a strong consumer brand so it’s not like they’re going to disappear, but I understand the bear case.

Sam A is pretty well connected and knows the game well. No doubt there will be some risks where the whole thing goes right down to zero, but I personally wouldn't bet against them.

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

#187

Post by int_19h »

atonse wrote: post #74
palmotea wrote: post #47

Earlier quoted context omitted.

> I would think that sort of framing implies that the government gives them permission to exist. > Rather than, the natural state is that they exist unless they do something bad enough to be shut down. JFC, come on. Corporations are legal entities and have no existence separate from the law. If they even have a natural state, that natural state is non-existence.

Yeah I think we're splitting hairs and actually aren't in any sort of disagreement here. I 100% agree that you have to be registered on paper with a government entity to get all the legal protections, insurance, etc etc etc. I've been a business owner for nearly 20 years. Like, a real business, with real paperwork and insurance and all that. I'm thinking of all the unofficial mom and pops that transact and do busines…

I mean, if Sam Altman wants to run OpenAI as individual proprietorship, without the limited liability that corporate shield gives, he's totally welcome to do so, and that would require far less paperwork.

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

#188

Post by int_19h »

kelipso wrote: post #49
rhetocj23 wrote: post #33

Earlier quoted context omitted.

[flagged]

This is the guy who had everyone here rooting for him when the OpenAI board tried to kick him out. Which was almost certainly the result of a very successful PR campaign carried out by him. He's not really comparable with Jobs. This guy is a politician and Jobs was a product guy.

I don't recall "everyone" rooting for him when OpenAI board tried to kick him out. Not even on HN.

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

#189

Post by int_19h »

krapp wrote: post #36
rxyz wrote: post #21

Earlier quoted context omitted.

Corporations used to not have that much political power

Corporations used to have their own militaries, they colonized entire nations and owned people. They underwrote kings and empires.

While this is all true, they were limited to targeting smaller, less economically developed nations, where a private army was sufficient.

Today, though, one can reasonably argue that megacorps have managed to successfully capture the most powerful government on Earth.

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

#190

Post by terminalshort »

nateburke wrote: post #155

Cali could have called his bluff, he's not moving to Texas any time soon, and neither are his employees.

In most cases I would say you are correct, but this would be an extremely rare exception. OpenAI has about 7000 employees, and has raised a round at a $500B valuation with a realistic shot at a $1T valuation at IPO. That's a range of $70-140M of equity value per employee. So if employees hold 10% (and that's a low estimate) it's an average of $7-14M per employee. So for the average employee leaving CA before IPO would be a $1 million benefit over paying CA cap gains taxes.

Of course that isn't distributed remotely evenly and a lot of employees have not nearly enough to want to leave CA over taxes or just don't want to leave CA for other reasons. But OpenAI could easily say "HQ is moving to Austin. All employees must relocate and will be given $1M relocation bonuses." And the part left unsaid would be "Failure to comply means you lose 7 figures of options." Take rate on that would be >95%.

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