About a year ago (I believe), Sam Altman touted his mission to promote safe AI with claims that he has no equity in OpenAI and was never interested in getting any. Look where we are now, well played Sam.
OpenAI to become for-profit company
611–620 of 809 posts
Re: OpenAI to become for-profit company
#612Earlier quoted context omitted.
Google is asleep? Gemini is the product of a company that's asleep?
Gemini is the product of a company that is still half-asleep. We’re trying to work with it on a big data case, and have seen everything, from missing to downright wrong documentation, missing SDKs and endpoints, random system errors and crashes, clueless support engineers… it’s a mess. OpenAI is miles ahead in terms of ecosystem and platform integration. Google can come up with long context windows and cool demos all…
Fair enough.
I didn't realise it was that bad.
Re: OpenAI to become for-profit company
#613Earlier quoted context omitted.
> Dismantling OpenAI is actually a business strategy for many other players now. Which ones exactly? NVIDIA is drinking sweet money from OpenAI. Microsoft & Apple are in cahoots with it. Meta/Facebook seems happy to compete with OpenAI on a fair playing field. Anthropic lacks the resources. Amazon doesn't seem to care. Google is asleep.
Google is asleep? Gemini is the product of a company that's asleep?
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Re: OpenAI to become for-profit company
#614Can 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…
The nonprofit gives all its ownership rights to the for-profit in return for equity. The nonprofit is free to hold the equity and maintain control or sell the equity and use the proceeds for actual charitable purposes. As long as the money doesn't go into someone's pocket, it's all good (except that Sam Altman is also getting equity but I assume they found a way to justify that.) OpenAI will eventually be forced to c…
The significant asset isn't equity, it's control. 51% is much more valuable than 49% when the owned organization is supposedly working towards technology that will completely change how the world works.
Re: OpenAI to become for-profit company
#615About a year ago (I believe), Sam Altman touted his mission to promote safe AI with claims that he has no equity in OpenAI and was never interested in getting any. Look where we are now, well played Sam.
Does that amount to making a false forward-looking financial statement? (Specifically his claim that he wasn’t interested in getting equity in the future.)
This claim he made was likely helpful in ensuring the OpenAI team’s willingness to bring him back after he was temporarily ousted by the board last year for alleged governance issues. (Basically: “don’t worry about me guys, I’m in this for the mission, not personal enrichment”)
Since his claim likely helped him get re-hired, he can’t claim it was immaterial.
I really hope someone from the SEC scrutinizes him someday. The Singularity is too important to let it be run by someone with questionable ethics.
Re: OpenAI to become for-profit company
#616I’m confused by this news story and the response here. No one seems to understand OpenAI’s corporate structure or non profits at all. My understanding: OpenAI follows the same model Mozilla does. The nonprofit has owned a for-profit corporation called OpenAI Global, LLC that pays taxes on any revenue that isn’t directly in service of their mission (in a very narrow sense based on judicial precedent) since 2019 [1]. I…
Good questions! Right now, OpenAI, Inc. (California non-profit, lets say the charity ) is the sole controlling shareholder of OpenAI Global LLC (Delaware for-profit, lets say the company ). So, just to start off with the big picture: the whole enterprise was ultimately under the sole control of the non-profit board, who in turn was obligated to operate in furtherance of "charitable public benefit". This is what the l…
> I'm personally dubious about the specific claims you made about revenue, but that's hard to find info on, and not the core issue. The core issue was that they were obligated (not just, like, promising) to direct all of their actions towards the public good, and they're abandoning that to instead profit a few shareholders, taking the fruit of their financial and social status with them. They've been making some money for some investors (or losses...), but the non-profit was, legally speaking, only allowed to permit that as a means to an end.
Look at your OpenAI invoices. They're paid to OpenAI LLC, not OpenAI Inc. I can't find confirmation on openai.com what the exact relationship between OpenAI Global LLC and OpenAI LLC is but the former is on their "Our Structure" page and the latter is in their data processing addendum so it's probably the subsidiary in charge of operating the services while Global does training and licenses it downstream. OpenAI Global was the one that made that big $10 billion deal with Microsoft
That obligation is why they had to spin off a for-profit corporation. Courts are very strict in their interpretation of what "unrelated business income" is and the for-profit LLC protects the non-profit's tax exempt status.
> "why does it feel unfair for a non-profit entity to gift its assets to a for-profit"
What assets were gifted, exactly? They created the for-profit shortly after GPT2 (in 2019) and as far as I can tell that's the organization that has developed the IP that's actually making money now.
I honestly don't understand how this isn't in the interest of the nonprofit's mission. It's currently a useless appendage and will never have any real power or resources until either OpenAI is in the black and sending profit up to it, or they can sell OpenAI shares. I don't think the charity has any more claim over GPT4 than Google does, having invented transformers.
If this next round of funding goes through at $100-150 billion valuation, OpenAI Inc will probably be (on paper at least) the second wealthiest charity on the planet after the Novo Nordisk Foundation. This restructuring opens the way for the nonprofit to sell its shares and it's going to be a hell of a lot of money to dedicate towards their mission - instead of watching its subsidiary burn billions of dollars with no end in sight.
Re: OpenAI to become for-profit company
#617I'm willing to pair up with fundamentalist christians to derail this with the argument that he/this is satan/the end of the world.
Re: OpenAI to become for-profit company
#618Earlier quoted context omitted.
It's about the narrative they tried to create. The spin. It doesn't matter much if they were technically behaving as a for-profit entity previously. What matters is that they wanted the public (and likely, their talent) to _think_ that they weren't even interested in making a profit as this would be a philosophical threat to the notion of any sort of impartial or even hopefully benevolent originator of AGI (a goal wh…
Occam's razor: I think Sam's personal narrative is the correct one. He built a non-profit that took off in a way that he didn't expect it and now a for-profit is the best way to run the lightning they've caught. In terms of profit, AFAICT, Sam doesn't have designs on building extra large yachts and his own space agency but what he wants is to be the one at the stead of building what he considers is world-changing tec…
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Re: OpenAI to become for-profit company
#619Re: OpenAI to become for-profit company
#620Earlier quoted context omitted.
So no AI for anybody? I don't see how that's better.
No you can have AI. Just pay a license for people's content if you want to use it in your orphan crushing machine. It's what everyone else does. The entitlement has to stop.
That's just not feasible and you know it. That just means companies like Google and OpenAI (with billions of dollars from companies like MS and Apple) will monopolize AI. This isn't better for everybody else. It just means we're subject to the whims of these companies.
You're advocating for destroying all AI or ensuring a monopoly by corporations. Whose side are you actually on?