Earlier quoted context omitted.
I think it would be helpful for you to clarify which part of the chain you found objectionable: - in 2015, OpenAI was founded as a Delaware nonprofit - in 2017, OpenAI discovered the scaling laws and realized they needed far more compute (and thus money) than they had initially anticipated - that discovery precipitated a series of negotiations between the founders on how to restructure OpenAI to raise more money for…
The objectional part would be: - in 2019, OpenAI created a capped-profit subsidiary in order to attract funding from commercial entities Particularly if it creates a conflict of interest for anyone making decisions on behalf of the nonprofit
- in 2025, OpenAI’s for-profit entity recapitalized from a capped-profit entity with residuals flowing to the nonprofit to a traditional public benefit corporation with traditional equity
This is the egregious part. Before full for profit conversion it was worth $300B. Then after $850B.
A true fiduciary would set an auction and that would set the price for for profit valuation. And then all existing investors would keep the value of their positions, but would be diluted because capped profit is worth much less than unlimited profit and residuals.
But, they sold it to themselves for a bargain basement price. The nonprofit lost out on $300B or so. Maybe more.
It was not an arm’s length transaction. It was self-dealing.