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OpenAI to become for-profit company

reuters.com

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Re: OpenAI to become for-profit company

#791

Post by ttul »

ckcheng wrote: post #775
ttul wrote: post #420

Earlier quoted context omitted.

This is one reason why some companies have located engineers in Canada under subsidiaries. Canada not only allows you to deduct R&D costs as an expense, but there is an extremely generous R&D tax credit that yields a negative tax rate on engineers. For Canadian controlled private companies, this represents as much as a 60% refundable tax credit on R&D salaries. For foreign-owned companies, the benefit is smaller but…

Wait, you saying in Canada a R&D software company can essentially sell a dollar (of SDE produced goods) for a dollar and get a tax refund from the government?

If the R&D is going toward intellectual property that is owned by the company, yes. And it doesn’t matter if the company is foreign or locally owned. The program is designed to foster companies hiring engineers and scientists to work in Canada to increase the brain trust within the country.

Re: OpenAI to become for-profit company

#792

Post by stale2002 »

mlsu wrote: post #729
stale2002 wrote: post #699

Earlier quoted context omitted.

> somehow slip out of their control would be the sort of negligence that would land you in very hot water. > how this isn't the case here. Its not the case because they are doing the opposite of what you are suggesting. They are increasing the value of the asset that they own. Sure, the asset itself is being diluted, but the individual parts that it owns are more valuable. It is perfectly reasonable for a non profit…

Isn't the goal of a non-profit by its very definition... not profit? The goal of the openAI non-profit is something something control the development of AI for the good of all humanity, then it seems that they explicitly shouldn't care about making $20 billion, and explicitly should care about maintaining control of openAI. If you listen to their rhetoric, $20 billion is peanuts compared to the lightcone and the kard…

> Isn't the goal of a non-profit by its very definition... not profit?

Yes, and if you have a bunch more money then you can do more non profit activities that help the world.

Getting as much money as possible, so that the money can be used for your great cause, is the best way to effectively run a non profit.

> then it seems that they explicitly shouldn't care about making $20 billion

Of course they should, because that 20 billion dollars can be used for its goal more effectively than having control over a lower value asset.

> compared to the lightcone and the kardashev scale and whatever else.

You are pre-supposing that openAI's model itself is some magic, infinitely valuable asset already.

Its not. If it were, then it would already be worth 10 trillion dollars. But its not worth that.

Therefore the money is worth more than the asset. There are lots of other AI groups around here. OpenAI is just one of them, and they are not infinitely valuable.

Re: OpenAI to become for-profit company

#794

Post by gklitz »

bbor wrote: post #93
shakna wrote: post #32

Earlier quoted context omitted.

A non-profit entity will continue to exist. Likely for the reasons you stated.

Any reasonable court would see right through “well we trained it for the public good, but only we can use it directly”. That’s not really a legal loophole as much as an arrogant ploy. IMO, IANAL

That’s not what happened at all. There’s non-profit and for profit entities have always been selerate. The non-profit didn’t train anything, it invested money in the for profit to “further the mission towards agi” what’s happening now is just the non-profit defeating in OpenAI and turning to other endevours. Which makes a lot of sense since they tried to cut off the head of the for profit entity to take control, o company would like to see that independent of if the specific investor trying to gain control is a non-profit entity or a large investor.

Re: OpenAI to become for-profit company

#795

Post by gklitz »

DebtDeflation wrote: post #26

Wouldn't surprise me if this was the actual cause of the revolt that led to Altman's short-lived ouster, they just couldn't publicly admit to it so made up a bunch of other nonsensical explanations.

You have cause and effect flipped. The non-profit didn’t try to oust Sam because he was getting the non-profit to disengage from OpenAIs capped profit entity, that makes no sense and he can’t do that, he can’t stear the hand of the non-profit board. What is happening is that he’s detangling the non-profit from what will be the for-profit in order to not have people trying to throw him overboard. It was obviously going to happen the second the non-profit board thought they could just fire him and take control.

Re: OpenAI to become for-profit company

#796

Post by svnt »

Spivak wrote: post #659
svnt wrote: post #480

Earlier quoted context omitted.

Your equations do not account for the difference you mention, they only ensure growth will be slower and riskier.

That's fine, and in exchange we get significantly more tax revenue and close a gaping tax avoidance loophole. If taxing profit was a good proxy for business activity companies would use it when making their pricing tiers. But they don't. They use revenue and headcount because profit can and is gamed. I can't deduct my expenses on my own taxes and the world didn't end.

It’s an interesting point but your argument fails in that you get a standard deduction that probabilistically exceeds the expenses related to your job.

Perhaps it would need to be something like x%revenue above $10M, y%revenue above 1B beginning after three years of operation.

Re: OpenAI to become for-profit company

#797

Post by gklitz »

game_the0ry wrote: post #550
peanuty1 wrote: post #542

Earlier quoted context omitted.

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.

He never said he didn’t care about money, he said he didn’t care about making a lot more money at a point when he had tons of money.

Like you might say “I don’t really need another car we already have 8 at home between the two of us driving so why would I need a 9th?”

Re: OpenAI to become for-profit company

#798

Post by gklitz »

FrustratedMonky wrote: post #158

Not the only one questioning. Going for-Profit, and several top exec leaving at same time? Before getting the money? """Question: why would key people leave an organization right before it was just about to develop AGI?" asked xAI developer Benjamin De Kraker in a post on X just after Murati's announcement. "This is kind of like quitting NASA months before the moon landing," he wrote in a reply. "Wouldn't you wanna s…

The point is that OpenAI (the for protists) won’t die from not having invested AGI, they have an extremely profitable opportunity from “just” selling api calls and consultant hours. But that just brings them a successful shovel seller, not the societal transformation that the non-profit is aiming at, so it makes sense to detangle the non-profit and for profit.

Also because you know… the non-profit tried to strangle the for profit to take over control when they tried to oust Sam, so there’s that.

Re: OpenAI to become for-profit company

#799

Post by gklitz »

surfingdino wrote: post #723

Let me guess, the talent will be getting screwed on options?

Part of the reason is exactly so the talent gets easier liquidity on their stakes. Sucks to have been part of building the success that OpenAI is only to not be able to get anything significant out of it just because the company is a capped-profit under a non-profit, they’ll instead just end up owning shares in a traditional for profit on the market, with the ability to sell shares to pay of their mortgage or buy a new car etc.

Re: OpenAI to become for-profit company

#800

Post by gklitz »

opdahl wrote: post #288
jsheard wrote: post #29

Earlier quoted context omitted.

The ones selling the shovels are doing well, but otherwise yeah nobody is making any money. For the true believers that's just a temporary setback on the way to becoming trillionaires though.

Well they are spending billions to make shovels that they are selling for millions (roughly).

5 billions in losses on 3.7 billions in revenue. So yes OpenAI is losing money, but they are looking at a valuation of 150 billion, so they could easily get investors to fund the losses, but of cause the case for investors has to be “invest and you can make a profit” which can be a tough sell if the mission isn’t aligned with making a profit for the company.
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