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OpenAI to become for-profit company

reuters.com

541–550 of 809 posts

Re: OpenAI to become for-profit company

#541
post #492

Earlier quoted context omitted.

Ah the old "we must sacrifice the weak for the benefit of humanity" argument, where have I heard this before...

Who are the weak being "sacrificed"? And who is the one calling for action? Sorry for being dense, but I'm trying to understand if I'm the "strong" or the "weak" in your analogy.

> Who are the weak being "sacrificed"?

The work of artists, authors, etc.

I know currently the legal situation is messy, but that's exactly the point, anyone who can't engage in lengthy legal battle and defend their position in court are being sacrificed. The companies behind LLMs are spending hundreds of millions of dollars in lobbying and exploiting loopholes.

Let's be real without the data there wouldn't be LLMs, so it crazy that some people are downplaying its significance or value, while on the other hand they're losing sleep over finding fresh sources to scrape.

The big publishers seem to have given up and decided it's best to reach agreement with their counterparts, while independent authors are given the finger.

Re: OpenAI to become for-profit company

#542

OpenAI founded as non-profit. Sam Altman goes on Joe Rogan Podcast and says he does not really care about money. Sam gets caught driving around Napa in a $4M exotic car. OpenAI turns into for-profit. 3/4 of founding team dips out. Sketchy. This whole silicon valley attitude of fake effective altruism, "I do it for the good of humanity, not for the money (but I actually want a lot of money)" fake bullshit is so transp…

Regarding the 4 million dollar car, Sam already made a ton of money from Reddit and being President of YC.

Re: OpenAI to become for-profit company

#544
post #474

Earlier quoted context omitted.

Corporate tax is always only paid on profit and is usually a minor part of the tax draw for the government from corporations of all sizes. The vast majority of taxes paid in developed nations are employee taxes and whatever national+local sales taxes and health/pension equivalent taxes are (indirectly) levied (usually 60-80% of national income). Asset taxes are a bit different. It's true even in the bootstrapped comp…

Is this a US thing? In the UK employee tax is the employee’s to pay, not the company. Even if the company technically transfers it directly to the tax agency it’s not really their money. EDIT: I guess we do have employer tax as national insurance contributions too, always forget about that since I’ve always paid myself under that threshold

I'm not sure if you mean whether the UK has the same low corporation vs high income/pension/NI contributions income? If so, yes.

The UK does have employers NI contributions but that's not what I mean. The point is, if you spent a year to earn a gross £100k, and as you earn it, pay £50k of total tax, and with the remaining £40k/£50k you spend it on an employee at your company in salary and pay then £20k of tax, the government has that year earned £70k from that £100k passing through.

You can argue that really "£140k" has passed through, but it's not the case, because you created a new job that wouldn't otherwise have existed had you instead saved that £40k for a house. Either way HMRC gets £70k this year rather than £50k.

The wider point I was making is that all companies, even for-profit, pay tax to do just about anything, and companies with much lower sales than costs aren't just paying nothing. They generally have higher costs because they are paying people, and paying their taxes every month. The tax per employee is completely uncorrelated with the financial profit or thereof by the business, so it's a (sensible) misconception that companies that don't make profit like startups don't contribute to the economy. They do, by paying employment taxes.

I'm really making the point that you have to account for employee taxes (both employer and employee as you mention) for your costs as a business. That means, even though you already paid those yourself when you carried out the work to gain savings to invest in your business (to spend on an employee), you have to pay again when paying your employee.

I.e. Self-funded or businesses launched from previous accrued personal income where you invest your own time as well result in a bad tax situation;

whereas an employee earning £100k might pay £50k tax total and save £50k for a house (no VAT),

The alternate of investing that £50k in your business by paying someone £40k means you have to pay that employees PAYE, their Employer and Employee NI. So the government gets to re-tax most of that money when you use it to hire someone to build a new business with you, in a way they don't if you use it to buy a house, in terms of practical impact. When you pay yourself as an entrepreneur depends, there's dividends+PAYE in the UK (which requires yes you pay for both your employer and employee tax for yourself) or capital gains(ignoring tax schemes), either way, you do get taxed at some point to bring cash out.

The government in other words massively benefits from unprofitable for-profit companies so long as they hire some people, especially if the companies are self-funded. But even if it is investment, it's better to have that money spent on salaries now in new companies than sitting as stock in larger companies that keep cash reserves or use schemes to avoid tax. They get much more tax from people starting even unprofitable new businesses, than from employees who simply save money.

It's one of the reasons that since the introduction of income taxes (more or less WW1 in most countries!), you need money to get money in way that you fundamentally did not in the same way back when you could earn $50 from someone and directly use that same $50 to pay someone for the same skills without any loss of value.

Re: OpenAI to become for-profit company

#545

Can anybody explain how this actually works? What happens to all of the non-profit's assets? They can't just give it away for investors to own. The non-profit could maybe sell its assets to investors, but then what would it do with the money? I'm sure OpenAI has an explanation, but I really want to hear more details. In the most simple analysis of "non-profit becomes for-profit", there's really no way to square it ot…

If the assets were sold to the for profit at a fair price I could see this being legal (even if it shouldn't be). At least in that case the value generated by the non-profit tax free would stay locked up in non-profit land. The biggest problem with this is that there's basically no chance that the sale price of the non-profit assets is going to be $150 billion, which means that whatever the gap is between the valuati…

> there's basically no chance that the sale price of the non-profit assets is going to be $150 billion

The non-profit’s asset is the value of OpenAI minus the value of its profit-participation units, i.e. the value of the option above the profit cap. Thus, it must be less than the value of OpenAI. The non-profit owns an option, not OpenAI.

Re: OpenAI to become for-profit company

#546
post #541

Earlier quoted context omitted.

Who are the weak being "sacrificed"? And who is the one calling for action? Sorry for being dense, but I'm trying to understand if I'm the "strong" or the "weak" in your analogy.

> Who are the weak being "sacrificed"? The work of artists, authors, etc. I know currently the legal situation is messy, but that's exactly the point, anyone who can't engage in lengthy legal battle and defend their position in court are being sacrificed. The companies behind LLMs are spending hundreds of millions of dollars in lobbying and exploiting loopholes. Let's be real without the data there wouldn't be LLMs,…

What about programmers? I never consented to have my code consumed by LLMs.

Re: OpenAI to become for-profit company

#547

The most surprising thing to me in this is that the non-profit will still exist. Not sure what the point of it is anymore. Taken as a whole, OpenAI is now just a for-profit entity beholden to investors and Sam Altman as a shareholder. The non-profit is really just vestigial. I guess technically it's supposed to play some role in making sure OpenAI "benefits humanity". But as we've seen multiple times, whenever that g…

> The most surprising thing to me in this is that the non-profit will still exist. That entity will scrape the internet and train the models and claim that "it's just research" to be able to claim that all is fair-use. At this point it's not even funny anymore.

Not funny anymore

Re: OpenAI to become for-profit company

#548

The most surprising thing to me in this is that the non-profit will still exist. Not sure what the point of it is anymore. Taken as a whole, OpenAI is now just a for-profit entity beholden to investors and Sam Altman as a shareholder. The non-profit is really just vestigial. I guess technically it's supposed to play some role in making sure OpenAI "benefits humanity". But as we've seen multiple times, whenever that g…

> The most surprising thing to me in this is that the non-profit will still exist. That entity will scrape the internet and train the models and claim that "it's just research" to be able to claim that all is fair-use. At this point it's not even funny anymore.

Not funny anymore.

Re: OpenAI to become for-profit company

#549
post #424

Earlier quoted context omitted.

Several of the agricultural revolutions we went though is what freed up humanity to not spend all of it's work producing sustenance, leaving time for other professions like making art and music. But it also destroyed a lot of jobs for people who were necessary for gathering food the old inefficient way. If we take your argument to it's logical conclusion, all progress is inherently bad, and should be stopped. I depos…

The net result was positive in that new jobs were created for every farming job lost, as people moved to cities. If AI replaces millions of jobs, it will be a net negative in job availability for working class people. I agree with your last point, the way the system is set up is incompatible with the looming future.

The jobs in the cities weren't created by the new farming techniques though, those new farming techniques only removed jobs by the millions like you are saying AI might do.

Re: OpenAI to become for-profit company

#550

OpenAI founded as non-profit. Sam Altman goes on Joe Rogan Podcast and says he does not really care about money. Sam gets caught driving around Napa in a $4M exotic car. OpenAI turns into for-profit. 3/4 of founding team dips out. Sketchy. This whole silicon valley attitude of fake effective altruism, "I do it for the good of humanity, not for the money (but I actually want a lot of money)" fake bullshit is so transp…

Regarding the 4 million dollar car, Sam already made a ton of money from Reddit and being President of YC.

Liking and buying expensive cars is not wrong.

But buying a $4M car while saying you do not car about money is a mis-alignment between words and actions, which comes off untrustworthy.

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