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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

#91

Post by mdasen »

throwup238 wrote: post #37
swyx wrote: post #20

Earlier quoted context omitted.

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.

The difference is that Mozilla’s for-profit arm is owned by the non-profit. The for-profit part of OpenAI is there to make a lot of individuals and for-profit corporations rich.

OpenAI’s profit-generating subsidiary isn’t just there to further the non-profit mission like a museum gift shop or Mozilla’s for-profit subsidiary.

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

#92

Post by booi »

JumpCrisscross wrote: post #90
hodder wrote: post #66

Can someone explain to me why California would believe Sam Altman plans to stay in California? This is a weak handshake agreement that could easily be flipped post IPO. The very flip from non-profit to IPO shows he will do what it takes for OpenAI to "succeed", so why would the geographical location be any more permanent than corporate structure. This isnt a diss to Sam either, it just shows he is motivated by whatev…

> Can someone explain to me why California would believe Sam Altman plans to stay in California? The simple answer is unless developing LLMs becomes commoditised, the best place in the world to do it is in San Francisco. You don't take your manufacturing business out of Shenzhen without very good reason.

except developing AI is very much a knowledge exercise with very little dependency on location.

You don't move your manufacturing business out of Shenzhen because the entire hard supply chain from mining, refining, manufacturing, test, ship and trade are all there. You can't move a refinery that easily much less the entire supply chain.

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

#93

Post by JumpCrisscross »

mandevil wrote: post #42
swyx wrote: post #14

Earlier quoted context omitted.

> if Bonta blocked its plan to convert to a simpler corporate structure. i'm a bit out of the loop but honestly why does California have a say? surely the investor base and Microsoft was a far harder negotiation than this one. this one smells of govt overreach.

Because of the unusual history of OpenAI, the Government had far more of a say than normal for a company. Remember, OpenAI was originally created as a California non-profit (a charity doing work to create a better AI future). As a charity, it doesn't have to pay the same taxes as it would as a for-profit company, but in exchange it has more rules it needs to follow. And then it released ChatGPT, it exploded in value,…

> a California non-profit (a charity doing work to create a better AI future)

Note: non-profit != charity. (All charities are non-profits. Not all non-profits are charities. PACs and non-profit hospitals, for example, are not charities, though the latter can have charitable arms.)

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

#94

Post by JumpCrisscross »

palmotea wrote: post #47
atonse wrote: post #24

Earlier quoted context omitted.

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…

> 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. JFC, come on. Corporations are legal entities and have no existence separate from the law. If they even have a natural state, that natural state is non-existence.

> If they even have a natural state, that natural state is non-existence

A corporation is a legal fiction that describes an association of people. The association is real and has a natural state. The corporate existence does not. (Analogous: a house is real. Land is real. Property is a social construct.)

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

#96

Post by JumpCrisscross »

thereitgoes456 wrote: post #35
FloorEgg wrote: post #13

Earlier quoted context omitted.

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. Gain…

> Restructuring is not a risk...his use of employee manipulation to regain his position is not a risk; it is the only option he had

In both cases he had the option of accepting the status quo.

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

#97

Post by JumpCrisscross »

kelipso wrote: post #49
rhetocj23 wrote: post #33

Earlier quoted context omitted.

[flagged]

This is the guy who had everyone here rooting for him when the OpenAI board tried to kick him out. Which was almost certainly the result of a very successful PR campaign carried out by him. He's not really comparable with Jobs. This guy is a politician and Jobs was a product guy.

> This guy is a politician and Jobs was a product guy

They're both excellent marketers.

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

#98

Post by burningChrome »

jameslk wrote: post #11

TFA: > OpenAI had spent months making the case that it was the economic heart of the California economy—and would be willing to leave if Bonta blocked its plan to convert to a simpler corporate structure. https://x.com/sama/status/1983223056668746218 : > California is my home, and I love it here, and when I talked to Attorney General Bonta two weeks ago I made clear that we were not going to do what those other compa…

Musk said the same thing about CA too. All CEO's make decisions based on what is best for them and their companies. There is no loyalty in business.

Edward Niedermeyer, author of “Ludicrous: The Unvarnished Story of Tesla Motors,” said Musk was happy to benefit from California’s largesse when it suited him and to move on when he saw fit.

“I think Musk has made the calculation that he’s gotten all the benefits he’s likely to get out of the state and he’s moving on to the next one,” Niedermeyer said. “The state of California clearly thought that all its work bought loyalty [from Musk] but, instead, I think it bought a sense of entitlement.”

Elon Musk’s messy divorce with California leaves ugly grievances all around: https://www.latimes.com/california/story/2024-07-23/elon-mus...

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

#99

Post by brokencode »

booi wrote: post #92
JumpCrisscross wrote: post #90

Earlier quoted context omitted.

> Can someone explain to me why California would believe Sam Altman plans to stay in California? The simple answer is unless developing LLMs becomes commoditised, the best place in the world to do it is in San Francisco. You don't take your manufacturing business out of Shenzhen without very good reason.

except developing AI is very much a knowledge exercise with very little dependency on location. You don't move your manufacturing business out of Shenzhen because the entire hard supply chain from mining, refining, manufacturing, test, ship and trade are all there. You can't move a refinery that easily much less the entire supply chain.

Sure, but most of the country’s AI talent is concentrated there. Not to mention venture capital.

What’s the advantage of moving? Maybe lower taxes and a cheaper rent.

That seems like a small price to pay compared to the hundreds of billions they’re putting into data centers.

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

#100

Post by yellow_postit »

JumpCrisscross wrote: post #90
hodder wrote: post #66

Can someone explain to me why California would believe Sam Altman plans to stay in California? This is a weak handshake agreement that could easily be flipped post IPO. The very flip from non-profit to IPO shows he will do what it takes for OpenAI to "succeed", so why would the geographical location be any more permanent than corporate structure. This isnt a diss to Sam either, it just shows he is motivated by whatev…

> Can someone explain to me why California would believe Sam Altman plans to stay in California? The simple answer is unless developing LLMs becomes commoditised, the best place in the world to do it is in San Francisco. You don't take your manufacturing business out of Shenzhen without very good reason.

The Texas Stock Exchange launches next year and I predict we will see a lot of tech try to move to launch there given txse claim to have lower compliance and less esg needs.
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