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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

#31
post #24

Earlier quoted context omitted.

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

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. Unless you mean, they need the government's "permission" to even file to become a corporation... But even in that case, you aren't asking for permission, you're doing the old school equivalent of signing up for a domain, y…

It's more than that. When you file to incorporate, there is a birth. A new person is created, one that can potentially never die. Yes, it's routine, but it wasn't always, and it doesn't need to be forever. The ability to create a new, fake, person in order to shield yourself and your business partners from liability is a not a right. It is a deliberate policy that some sovereign jurisdictions allow their citizens.

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

#32

It used to be that you could find an IPO underwriter after 100M in revenue and growing YoY above others in the competitive basket. I’m not sure that’s true anymore, I think you still need the revenue, but just need attention. everything else is just whatever because you can’t predict 10 year outcomes for any business at this point with any level of confidence, and there’s nothing to compare it to other than extremely…

For folks curious, In terms of IPO, rule of 40 was common when I was involved in thinking about IPOs. https://www.mckinsey.com/industries/technology-media-and-tel...

Depends how you look at it but at DO we shot for 50, ended around 55. (25 % growth + 30 % profitability)

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

#33

Earlier quoted context omitted.

Can someone explain to me what Sam Altman is doing to be so far ahead of everyone else in terms of navigating these high stakes roles? This happened at YC and a number of other places too, he goes into situations with nothing and comes out on top despite all odds. Is he that skilled an operator, negotiator, or manipulator or something?

I can only speculate so take it with a spoon of salt... But people who are really good at sussing out other people's wants can find ways to make more people happy. It's like a maze of interests and I guess he's just really motivated and good at navigating and aligning them (at least among the rich and powerful). He also seems to understand something about power and perception, in that he takes calculated risks that s…

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

#34

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.

There is no constitutional right to incorporate. Theoretically states could stop it at any time. Although they would still have to honor corporations formed in other states so it’s of limited effect.

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

#35

Earlier quoted context omitted.

Can someone explain to me what Sam Altman is doing to be so far ahead of everyone else in terms of navigating these high stakes roles? This happened at YC and a number of other places too, he goes into situations with nothing and comes out on top despite all odds. Is he that skilled an operator, negotiator, or manipulator or something?

I can only speculate so take it with a spoon of salt... But people who are really good at sussing out other people's wants can find ways to make more people happy. It's like a maze of interests and I guess he's just really motivated and good at navigating and aligning them (at least among the rich and powerful). He also seems to understand something about power and perception, in that he takes calculated risks that s…

It's too early to say if his risks "keep working out". Restructuring is not a risk. His, and others', original decision to make the company a non-profit was also not a calculated risk in this sense.

When he was fired from OpenAI, his use of employee manipulation to regain his position is not a risk; it is the only option he had. It was his bond maturing, of carefully cultivated loyalty he had accrued over years. Gaining that loyalty was not really a risk. It was smart politics.

One risk he took is: signing away such a large portion of the company to Microsoft. I'm not sure whether that is working out.

Another risk he took is: neglecting and sidelining the "safety" portion of his organization. This caused a talent exodus and led to the formation of many competitors. I'm not sure whether that is working out either.

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

#36
post #21
post #15

Earlier quoted context omitted.

> threatening economic damage to California. whoa there. corporations have the right to move to the best location for them. California does not have the eternal right to OpenAI's taxes and employee base. think about what you're implicitly assuming here. if one company simply leaving causes concerning "damage" then perhaps it is the government that is the problem, not the corporation driving economic growth.

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.

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

#37
post #20

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.

you can IPO the for-profit subsidiary. done before. the main tricky part is resolving the tax issues since as a non profit you are exempt, but obviously a for profit is not exempt from paying taxes

Mozilla has this same structure (non-profit parent, for-profit subsidiary) because the subsidiary has to pay taxes on the money Google pays to be Firefox's default search engine.

As do many gift shops attached to non-profit museums and art galleries.

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

#39

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.

It is being restructured to no longer be a nonprofit, but a for-benefit corporation instead. That is why California's approval was required (and IMO is just as corrupt as it sounds).

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

#40

Prediction for the future: OpenAI IPO's lots of money changes hands, it chugs along for a while, hits a hard spot and then is taken private for pennies on the dollar by Microsoft.

Could you elaborate? Not looking for a proof, just want to understand your train of thought. Always liked your commentary. Thanks!
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