I’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]. In Mozilla’s case that’s the revenue they make from making Google the default search engine and in OpenAI’s case that’s all their ChatGPT and API revenue. The vast majority (all?) engineers work for the for-profit and always have. The vast majority (all?) revenue goes through the for-profit which pays taxes on that revenue minus the usual business deductions. The only money that goes to the nonprofit tax-free are donations. Everything else is taxed at least once at the for-profit corporation. Almost every nonprofit that raises revenue outside of donations has to be structured more or less this way to pay taxes. They don’t get to just take any taxable revenue stream and declare it tax free.
All OpenAI is doing here is decoupling ownership of the for-profit entity from the nonprofit. They’re allowing the for profit to create more shares and distribute them to entities other than the non-profit. Or am I completely misinformed?
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 which is laid plainly in their mission statement).
As you've realized, this should have been (and was) obvious for a long time. But that doesn't make it any less hypocritical or headline worthy.
>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 which is laid plainly in their mission statement)
And now they want to cast off any pretense of that former altruistic yolk now that they have a new, better raison d'etre to attract talent: making absolutely unparalleled stacks of cash.
It sort of remains to be seen whether they can actually make that cash - they're no longer the only game in town, and while they have an obvious adoption and brand name recognition advantage in their industry, they've also been running real hot on investor funding on the assumption that more processing power is what it's gonna take for them to stay competitive and continue improving. But they're gonna have to fight Google and Microsoft on that front. If there is a general plateau coming up in all of these models, or they fail to keep pace with their extremely well-supplied competition, it might not be so easy to convert their position into money.
Note Elon made a significant "donation" early into OpenAI given their non-profit designation and intentions, in return receiving zero equity. The donation was also received tax free
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 tech. One could rationally call this power-hungry but one could also rationally call this just helicopter parenting of a tech you've helped built. And for that a for-profit that is allowed to maximize profits to re-invest in the tech is the optimal setup (esp if all the competitors are doing the same)
Is this a different org than when it started? Yes. Was this a dupe from the beginning? I don't think so.
"But why can't he have a more worldly-aligned board looking over his shoulder?"
Because we live in California and have a bad taste for governance by committee or worse: governance by constant non-representative democracy (see: Housing).
If this now completely comes off the wheels, I still think Congressional action can be a stopgap, but atleast for now, this restructure makes sense to me.
What do you do with a a lot of money past a point? A corporate controlled AGI being just a stop on the way to build another private space agency seems like a...letdown.
I don't think the narrative makes sense. It was clear from way back in 2016 that training would take a ton of resources. Researchers were already been sucked into FAANG labs because they had the data, the compute, and the money. There was never a viable way for a true non-profit to make world-changing, deep learning-based AI models.
When seen through the rearview mirror, the whole narrative screams of self-importance and duplicity. GPT-2 was too dangerous, and only they were trust-worthy enough to possess. They were trust-worthy because this was a non-profit, so "interest aligned with humanity". This charade has continued even to barely some months ago.
It isnt a tax thing or a money thing, its a control and governance thing.
The board of the non-profit fired Altman and then Altman (& MS) rebelled, retook control, & gutted the non-profit board. Then, they stacked the new non-profit board with Altman/MS loyalists and now they're discharging the non-profit.
It's entirely about control. The board has a legally enforceable duty to its charter. That charter is the problem Altman is solving.
The problem is that OpenAI calls itself OpenAI when it's completely sealed off, and calls itself a non-profit when, as you say, almost everything about is for profit. Basically they're whitewashing their image as an organization with noble goals when it's simply yet another profit motivated company. It's fine if that's what they are and want to be, but the lies are bothersome.
There's a now-quintessential HN post format, "Poster criticizing X don't seem to under [spray of random details about X that don't refute the criticism - just cast posts as ignorant]".
In this case, Mozilla as a non-profit owning a for-profit manages to more or less fulfill the non-profit's mission (maintaining an open, alternative browser). OpenAI has been in a hurry to abandon it's non-profit mission for a while and the complex details of its structure doesn't change this.
But unfortunately charities and not-for-profits putting their core business into a company, and then eventually selling it off is not unprecedented. For example, The Raspberry Pi Foundation was a not-for-profit organisation around Raspberry Pi. They formed a LLC for their commercial operations, then gradually sold it off before eventually announcing an IPO: https://www.raspberrypi.org/blog/what-would-an-ipo-mean-for-....
I think it is terrible that not-for-profits are just being used as incubators for companies that eventually take the core mission and stop primarily serving the public interest.
There are of course other examples of charities or not-for-profits that put part of their core operations in a company and don't sell out, instead retaining 100% ownership - for example Mozilla. However, I think there should be some better way for impactful not-for-profits to have some revenue generating aspects in line with their mission (offset by allowing temporary surplus to cover future expenses, or by other expenses).
I don't think it's unprecedented, even at this scale.
Novo Nordisk, the pharmaceutical company behind Semaglutide (aka Ozempic) with a market cap >$600 bilion, was founded by the Novo Nordisk Foundation before going public. The latter now has an endowment of over $150 billion and owns a significant fraction of the public company.
This might be unpopular, but I don't think Mozilla's behavior is inherently good[1]. And even if it has, I don't think it should be used as a litmus test for other corporate behavior. Every company should stand on its own against scrutiny.
How is it possible to make tax free "donations" for profit making applications? You seem to imply there is nothing nefarious about the setup. Except the non-profit designation doesn't actually perform no social services, instead stand as a business structure to skirt taxation. Change my mind
> How is it possible to make tax free "donations" for profit making applications?
The nonprofit invests the tax free donations into the for-profit. It gets to keep its equity just like any other investor and as long as that equity held by the non-profit, there's no taxable event. If the nonprofit sells its share - since it was closely involved in the creation and management of the for-profit as an active investment - it becomes a taxable event under the unrelated business income tax rules. Until that time, the only "profit making applications" like ChatGPT and the API are run by the for-profit, which - I repeat - pays its taxes.
I genuinely don't understand why people think they've skirted taxation except out of sheer ignorance of how non-profits actually work. A 501(c)(3) is not some magic Monopoly "get-out-of-tax-free" card and the IRS isn't stupid, there's a ton of rules for tax exemption. They'd have a much easier time with tax avoidance if they were an actual for profit corporation with billions of dollars because GAAP rules are a lot more forgiving than non-profit regulations.
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 linked article means by "significant governance changes happening behind the scenes," which should hopefully convince you that I'm not making this part up.
To get really specific, this change would mean that they'd no longer be obligated to comply with these CA laws:
The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.
... The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual.
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.
Naturally, this makes it very hard to explain how the nonprofit could give up basically all of its control without breaking its obligations.
All the above covers "why does it feel unfair for a non-profit entity to gift its assets to a for-profit", but I'll briefly cover the more specific issue of "why does it feel unfair for OpenAI in particular to abandon their founding mission". The answer is simple: they explicitly warned us that for-profit pursuit of AGI is dangerous, potentially leading to catastrophic tragedies involving unrelated members of the global public. We're talking "mass casualty event"-level stuff here, and it's really troubling to see the exact same organization change their mind now that they're in a dominant position. Here's the relevant quotes from their founding documents:
OpenAI is a non-profit artificial intelligence research company. Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. Since our research is free from financial obligations, we can better focus on a positive human impact...
It’s hard to fathom how much human-level AI could benefit society, and it’s equally hard to imagine how much it could damage society if built or used incorrectly. Because of AI’s surprising history, it’s hard to predict when human-level AI might come within reach. When it does, it’ll be important to have a leading research institution which can prioritize a good outcome for all over its own self-interest.
We commit to use any influence we obtain over AGI’s deployment to ensure it is used for the benefit of all, and to avoid enabling uses of AI or AGI that harm humanity or unduly concentrate power. Our primary fiduciary duty is to humanity...
We are concerned about late-stage AGI development becoming a competitive race without time for adequate safety precautions. Therefore, if a value-aligned, safety-conscious project comes close to building AGI before we do, we commit to stop competing with and start assisting this project. We will work out specifics in case-by-case agreements, but a typical triggering condition might be “a better-than-even chance of success in the next two years.”
Sorry for the long reply, and I appreciate the polite + well-researched question! As you can probably guess, this move makes me a little offended and very anxious. For more, look at the posts from the leaders who quit in protest yesterday, namely their CTO.
> 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.
Thanks for another polite response! I think this is the fundamental misunderstanding:
What assets were gifted, exactly? ...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.
The charity will gift its control of a $100B company for some undisclosed "minority stake" (via a complex share dilution scheme), in exchange for nothing other than "the people we're gifting it to have promised to do good with it". It's really that simple. The charity never was intended to draw profit from the for-profit, and the "never have any real power" contention is completely inaccurate -- they have direct, sole control over the whole enterprise.
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
Even putting aside the core issue above (they won't have many shares to sell), the second part of my comment comes back here: what would they buy with all that money? Anthropic? Their explicit mission is to beat for-profit firms in the race to AGI so convincingly that an arms race is avoided. How could they possibly accomplish this after gifting/selling away control of the most capable AI system on the planet?
Finally, one tiny side point:
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.
I'm guessing you're drawing on much more direct experience than I am and I don't question that, but this seems like a deceptive framing. Normal charities have no issues with unrelated business income, because they don't run "trades or businesses", they just spend their money. I know that selling ChatGPT subscriptions is a large income source, but it's far from the only way to pursue their mission -- and is wildly insufficient, anyway. They in no way were forced to do it to meet their obligations.
> The charity will gift its control of a $100B company for some undisclosed "minority stake" (via a complex share dilution scheme), in exchange for nothing other than "the people we're gifting it to have promised to do good with it". It's really that simple. The charity never was intended to draw profit from the for-profit.
That's not my interpretation. It sounds like the restructuring is part of the deal that values OpenAI at $100-150 billion [1]. They're not "gifting" away anything any more than a Series A investor gifts something to a Series B investor. They're restructuring so that their stake will be worth more afterwards than it is now, regardless of the percentages. That's what every company owner goes through when the company raise a VC round, goes public, or even just offers employees stock options. That doesn't change because the owner is a nonprofit and it sounds like until they restructure, the for-profit is worth nowhere near that crazy 12 figure number.
"Minority stake" just means that they won't have enough to control the corp out right with 50%+1 which is probably what everyone wants to justify the investment. Reuters TFA says "The plan is still being hashed out with lawyers and shareholders and the timeline for completing the restructuring remains uncertain" so we don't really know what the post valuation numbers look like or who is getting what. We also don't know how the voting vs non-voting shares will split. Losing majority control after multiple multi-billion dollar rounds is the norm so if Microsoft's previous $10 bil investment converts and 10-20 pts go to the employee pool, it's a perfectly fair deal.
> Even putting aside the core issue above (they won't have many shares to sell), the second part of my comment comes back here: what would they buy with all that money? Anthropic? Their explicit mission is to beat for-profit firms in the race to AGI so convincingly that an arms race is avoided. How could they possibly accomplish this after selling control of the most capable AI system on the planet?
As far as I can tell, without this deal OpenAI LLC goes bankrupt under the rumored $5b/yr losses and the charity loses all relevance when the bankruptcy court fire sales the IP. With this deal, it can create a secondary market and use the funds to focus on its actual mission. The only way that his deal doesn't make sense (in my mind) is if you believe that GPT4/o1/whatever are the keys to fulfilling OpenAI's mission and it becomes impossible if it loses control. Personally I find that very hard to believe, which might be the actual disconnect we're having here.
What would they buy? They'd hire people to do research under their umbrella instead of a for-profit one, fund compute infrastructure for researchers who don't have billions for H100s, give grants to organizations, or spin off more startups. Even if it's a 20% stake of a $100 billion, that's enough for a ivy league sized endowment that can fund AI research for generations. If it's a 49% stake of $150 billion, that makes it the second wealthiest charity after Novo Nordisk Foundation - which continues to do tons of biomedical research even though it doesn't have total control over the public Novo Nordisk or the semaglutide IP.
OpenAI would become one of the largest grant giving organizations in the world overnight using just the interest from the endowment. Imagine the equivalent to 50-100% of the NSF's annual grant budget going just to AI research!
> Normal charities have no issues with unrelated business income, because they don't run "trades or businesses", they just spend their money.
See my other reply [2] for a sample of some nonprofits that have for-profit arms. A significant fraction of them do, especially those that offer some sort of product or service (I don't have hard stats but I'd venture it's the majority of the major charities that do the latter). "Normal" charities that just disburse grant money and spends donations is only one type among many.
What counts as “related” to the charity’s mission is fuzzy but in practice the courts have been rather strict. They don’t have to form for-profit subsidiaries to pay those taxes but it helps to derisk the parent because potential penalties include loss of nonprofit status.
For example, the nonprofit Metropolitan Museum of Modern Art has a for-profit subsidiary that operates the gift shop. National Geographic Society has National Geographic Partners which actually owns the TV channel and publishes the magazine. Harvard and Stanford have the Harvard Management Company and Stanford Management Company to manage their endowments respectively. The Smithsonian Institute has Smithsonian Enterprises. Mayo Clinic => Mayo Clinic Ventures. Even the state owned University of California regents have a bunch of for-profit subsidiaries.
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 other than non-profit assets (generated through donations) just being handed to somebody for private ownership.
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 valuation of the assets and the valuation of the company is pure profit derived from the gutting of the non-profit.
If this is allowed, every startup founded from now on should rationally do the same thing. No taxes while growing, then convert to for profit right before you exit.
It’s pretty great if you can manage to have the parent be 501(c)(3). Have all the early investors “donate” 90% of their investment to the 501(c)(3) and invest 10% in the for-profit subsidiary the old-fashioned way. They get a tax deduction, and the parent owns 90% of the subsidiary. Later on, if the business is successful, the parent cashes out at the lowest possible valuation they can pull off with a mostly straight face, and all the investors in the subsidiary end up owning their shares, pro rata, with no dilution from the parent. The parent keeps a bit of cash (and can use it for some other purpose).
Of course the investors do end up owning their shares at a lower basis than they would otherwise, and they end up a bit diluted compared to a straightforward investment, but the investors seem likely to more than make up for this by donating appreciated securities to the 501(c)(3) and by deferring or even completely avoiding the capital gains tax on their for-profit shares.
Obviously everyone needs to consult their lawyer about the probability of civil and/or criminal penalties.
I haven't seen any details, but isn't this a pretty straightforward way of doing it? The non-profit has had majority ownership of the for-profit subsidiary since 2019. The already-for-profit subsidiary has owned all the ChatGPT IP, all the recent models, all the employee relationships, etc etc.
The cleanest way for this to work is the for-profit to just sell more shares at the $150B valuation, diluting the non-profit entity below majority ownership. The for-profit board, which the non-profit could still probably have multiple seats on, would control the real asset, the non-profit would still exist and hold many tens of billions of value. It could further sell its shares in the non-profit and use the proceeds in a way consistent with its mission.
They wouldn't even have to sell that much - I am pretty sure the mega-fundrasing rounds from Microsoft etc brought the non-profit's ownership to just north of 50% anyway.
I don't see how this wouldn't be above board, it's how I assumed it was going to work. It would indeed mean that the entity that controls ChatGPT would now be answerable to shareholders, a majority of which would be profit seeking and a minority of which would be the non-profit with its mission, but non-profits are allowed to invest in for-profits and then sell those shares; all the calls for prosecutions etc seems just like an internet pitchfork mob to me.
The non-profit would have to approve the scheme, and a rational non-profit would not, because it gives up any ability the non-profit has to fulfill its charter.
Exactly, the question is this move in the non profits best interests? It's definitely in the best interest of the people running the non profit but I think many of the early donors wouldn't feel like this was what they were signing up for
I think the problem is early employees and investors were convinced to invest their time and money into a non profit. They were told that one of the reasons they should donate/work there as opposed to Google was because they were a non profit focused on doing good. Now when it seems like that non profit is successful that all is being thrown out the window in service of a structure that will result in more profit for the people running the non profit
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 company case:
If you earn say $100k and keep $50k after all the employee indirect/direct taxes. Now imagine you spend $40k of that $50k in savings, setting up a business. You spend $30k on another employee, paying $15k of employer and employee taxes, and spend the other $10k on a company to do marketing (who will spend $5k of that on employees and pay $2.5k of tax), and you earn less than $40k in income, by the end of year 1 you have:
1) A loss-making startup which nonetheless is further along then nothing
2) Out of $100k of your original value, $67.5k has already reached the government within 12 months
3) Your time doing the tech side was not compensated but could not (for obvious anti-fraud reasons) be counted as a loss and as you have noted, you don't pay tax when you make a loss, and you don't get any kind of negative rebate (except certain sales tax regimes or schemes).
If you are in the US, the above is currently much worse due to the insane way R&D Software spend needs to be spread immediately as a tax burden.
So it's really not fair to say a new startup isn't paying taxes. They almost always are. There are very few companies or startups that pay less than 50% of their income to staff, and almost all of those are the unicorns or exceptional monopoly/class leaders. Startups, and founders tend to disproportionately give more of their income and are essentially to that extent re-taxed.
Even though you saved the money in order to start a startup, and paid your due employee taxes, you then have to pay employee taxes to use it, etc.
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
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 still significant.
The Trump tax policy was a bizarre move for a country that relies so heavily on homegrown innovation. But then again, so was the entire Trump presidency.
Sure. But there are a lot of other tax advantages. For example, at least where I am, non profits don't pay sales tax on purchases, and don't have to pay into unemployment funds. I'm sure there is more, but I'm not super familiar with this world.
Corporations don't generally pay sales tax either, if the bean counters can justify the purchase as COGS. There are plenty of accountants who can play fast and loose with what constitutes COGS.
You actually don't even need to sell them. Just sign an exclusive, non-revocable license agreement.
Practically the same as selling, but technically not. Non-profit still gets to live up to it's original mission, on paper, but doesn't really do anything internally.
> 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.
I've actually worked through a similar situation for a prior startup. We were initially funded by a large, hospital system (non-profit) who wanted to foster innovation and a startup mentality. After getting started, it became clear that it was effectively impossible for us to operate like a startup under a non-profit. Namely, traditional funding routes were neigh impossible and the hospital didn't want direct ownership.
It's been many years, but the plan was essentially this:
* The original, non-profit would still exist
* A new, for-profit venture would be created, with the hospital having a board seat and 5% ownership. Can't remember the exact reason behind 5%. I think it was a threshold for certain things becoming a liability for the hospital as they'd be considered "active" owners above 5%. I think this was a healthcare specific issue and unlikely to affect non-profits in other fields.
* The for-profit venture would seek, traditional VC funding. Though, the target investors were primarily in the healthcare space.
* As part of funding, the non-profit would grant exclusive, irrevocable rights of it's IP to that for-profit venture.
* Everyone working for the "startup" would need to sign a new employment contract with the for-profit.
* Viola! You've converted a non-profit into a for-profit business.
I'm fuzzy on a lot of details, but that was the high level architecture of the setup. It's one of those things where the lawyers earn a BOAT LOAD of money to make sure every technicality is accounted for, but everything is just a technicality. The practical outcome is you've converted a non-profit to a for-profit business.
Obviously, this can't happen without the non-profit's approval. From the outside, it seems that Sam has been working internally to align leadership and the board with this outcome.
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What will be interesting is how the employees are treated. These types of maneuvers are often an opportunity for companies to drop employees, renegotiate more favorable terms, and reset vesting schedules.
> * As part of funding, the non-profit would grant exclusive, irrevocable rights of it's IP to that for-profit venture.
This is the part that should land people literally in jail. A non-profit should not be able to donate its assets to a for-profit, and if it's the same people running both companies, those people must be sent to prison for tax evasion. There is no other way to preserve the integrity of the "non-profit" status with this giant loophole.
After the non-profit sells its assets, it would either donate the proceeds in a way that would be aligned with the original mission, or continue to exist as a bag of cash, basically.
It seems incredibly convenient that a non-profit's leaders can say "I want equity in a for-profit company, so we will sell our assets to investors (who will hire me) and pass off the proceeds to some other non-profit org run by some other schmuck. This is in the public interest."
Every answer moving forward now will contain embedded ads for Sephora, or something completely unrelated to your prompt...
That money will go into the pockets of a small group of people that claim they own shares in the company... Then the company will pull more people in who invest in it, and they'll all get profits based on continually rising monthly membership fees, for an app that stole content from social media posts and historical documents others have written without issuing credit nor compensating them.
Maybe it’s a hint that the tax rate for small and medium companies should be reduced (or other non tax laws modified based on company size), to copy the advantages of this nonprofit to profit conversion, while taxes for large companies should be increased. It would maybe help make competition more fair and make survival easier for startups.
This is actually a good idea. I say we go even further and stop wasting so much money cleaning up after companies - get rid of the entire legal entity known as a corporation and let investors shoulder the full liability that comes with their ownership stake.
History has shown that limited liability is a massive advantage for our economy in encouraging both domestic and foreign investment. Seems unlikely we would put ourselves at a global disadvantage by doing this.
History has also shown that limited liability ends up costing me an awful lot of tax money to cover for some twat getting paid out (at a lower tax rate) with no consequences for their actions. Adding liability would certainly lower my taxes, and have a fantastic chilling effect on the type of trash that harm innocent bystanders with their reckless disregard for consequences in the name of chasing a dollar.
My expertise is in NFP hospitals. Generally, when they convert for for-profit part of that deal is the creation of a foundation funded with assets that are ostensibly to advance the original not for profit mission.
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 convert from a public charity to a private foundation and will be forced to give away a certain percentage of their assets every year so this solves that problem also.
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.
Difficult to see how these two stories aren't related.
OpenAI has been one of the most insane business stories in years. I can't wait to read a full book about it that isn't written by either Walter Isaacson or Michael Lewis.
I've only read Michael Lewis's "Liars Poker" which I enjoyed, but perhaps that sort of treatment of OpenAI would make it into more of a drama (which also seems to be somewhat true) and gloss over what the key players were really thinking which is what would really be interesting.
love chuck because the third act would be sam eating his own head while realising AGI was created to delete itself and taking away everything that is his
Do you have appetite for a poem? @sama made it on my list of Silicon Valley villains [1] long time ago:
"Villain staging the show /
open, close /
you can count on the con man to wow you /
even though, the only trick he knows /
is the “law” of scale /
but let's just hope /
The con man doesn't turn into evil /
when the thing he has is real and powerful"
Don't stop at robots.txt blocking. Look through your access logs, and you'll likely find a few IPs generating a huge amount of traffic. Look them up via "whois," then block the entire IP range if it seems like a bot host. There's no reason for cloud providers to browse my personal site, so if they host crawlers, they get blocked.
I wonder how the AI/copyright arguments will play out in court.
"If I read your book and I have a photographic memory and can recall any paragraph do I need to pay you a licensing fee?"
"If I go through your library and count all the times that 'the' is adjacent to 'end' do I need to get your permission to then tell that number to other people?"
Cases where we see the absurdity of copyright in its current form. But either we have it for everyone, including OpenAI, or for no one. Or are perhaps some more equal than others before the law?
We are booing Altman because his bait and switch feels unethical, but many of us saw it coming from a mile away, how does he make this transition to take advantage of the financial system so smoothly? Is there no legal guard for such maneuver, or is he just an insanely good player to circumvent all of them in plain view?
Just cobbling together articles I've read... Once the board failed to fire Altman, this transition was a done-deal, it was just a matter of when. Before the board fired Altman, he had been engaging in a more covert effort to take control - putting together personal attacks on various board members intended to drive them out and hiring people with a similar attitude to and loyalty to himself. When the board fired him, they didn't give any clear reasons and that's most mysterious part of the situation. Apparently they were all concerned about his campaign to take control of the board but they each had slightly different reasons for agreeing. I'd further speculate that the board thought in lawyer-advice terms - say as little as possible to avoid a retaliatory lawsuit.
But the board's lack of communication apparently allowed Altman to demonstrate he was more important to the organization than the formal/legal structure, 90% signed intents to quit and the board backed down. It seemed that Altman simply represented the attitude of the many Silicon Valley tech-people - once you have a chance of money, don't hold back, do everything you can to make it.
It has been running on an honor code, that someone pulling off something so slimy as to funnel money meant for non-profits would just get shunned by society and business. Yet here we are.
Ironically the one person with resources fighting it in a tangible way, even if for spite, is Elon Musk.
Converting to a for-profit changes the tax status of donations. It also voids plausibility for Fair Use exemptions.
I can see large copyright holders lining up with takedowns demanding they revise their originating datasets since there will now be a clear-cut commercial use without license.
I hope I can join in, as a consumer, because there’s a difference between using the IP I contribute to conversations for a non-profit and a commercial enterprise.
I suspect that if you have ever posted copyrightable material online, you will have valid cause to sue them, as they very obviously have incorporated your work for commercial gain. That said, I unfortunately put your chances of winning in court very low.
And why is it, that winning chances are low? Why do the courts let big tech trample on our rights, but the small man goes to jail or has to pay fines for much much less? And how can this situation be improved?
Hopefully at least in the EU someone will wake up and make better laws or even start applying them to the current situation.
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.
> It also voids plausibility for Fair Use exemptions. I can see large copyright holders lining up with takedowns
I thought so for a moment but then again Meta, Anthropic (I just checked and they have a "for profit and public benefit" status whatever that means), Google or that Musk's thing aren't non-profits, are they ? There are lawsuits in motion for sure but with how it stands today I think ai gets off the hook.
This is the most important question, IMO! ChatGPT says that employees and donors would have to show that they were defrauded (lied to), which IMO wouldn’t exactly be hard given the founding documents. But the real power falls to the government, both state (Delaware presumably…?) and federal. It mentions the IRS, but AFAIU the DoJ itself could easily bring litigation based on defrauding the government. Hell, maybe throw the SEC in there!
In a normal situation, the primary people with standing to prevent such a move would be the board members of the non-profit, which makes sense. Luckily for Sam, the employees helped kick out all the dissenters a long time ago.
Genuinely curious because I have no idea how any of this works...
Would the founding documents actually count as proof of a lie? I feel like the defense could easily make the argument that the documents accurately represented their intent at the time, but as time went on they found that it made more sense to change.
It seems like, if the founding documents were to be proof of a lie, you'd have to have corresponding proof that the documents were intentionally written to mislead people.
Great point, and based on my amateur understanding you’re absolutely correct. I was mostly speaking so confidently because these founding documents in particular define the company as being founded to prevent exactly this.
You’re right that Altman is/will sell it as an unexpected but necessary adaptation to external circumstances, but that’s a hard sell. Potentially not to a court, sadly, but definitely in the public eye. For example:
We are concerned about late-stage AGI development becoming a competitive race without time for adequate safety precautions… We are committed to providing public goods that help society navigate the path to AGI.
And this is the very first paragraph of their founding blog post, from 2015:
OpenAI is a non-profit artificial intelligence research company. Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return. Since our research is free from financial obligations, we can better focus on a positive human impact.
In the US standing is a specific legal concept about whether you have a valid reason/role to bring up a particular issue. For example most of Donald Trump’s lawsuits around the 2020 election were rejected for a lack of standing rather than on merit (whether the case is any good).
So are they going to give elon equity? He donated millions to the non profit and now they are going to turn around and turn the company into a for-profit based on the work done with that capital.
Elon has allegedly refused equity in OpenAI. He seems to want it to go back to its original mission (which isn't going to happen) or die (which isn't going to happen).
Given that Musk was already worried about this and has a legal team the size of a small army, one would expect that any conditions he wanted applied to the donation would have been made at the time.
he doesn’t need the money, for one. he missed out and didn’t control it, and now he’s jealous that it took off. oh well, world’s richest man and smallest violin.
I never understood why people take non profit companies as more altruistic than for profit companies. The non profit doesnt mean no profits at all they still have to be profitable. It's just boils down to how the profits are distributed. There are plenty of sleezy institutions that are non profit like the NCAA.
Foundations and charitable organizations that pubically get their funding are a different story but I'm talking about non profit companies.
I even had one fellow say that the green bay packers were less corrupt than the other for profit nfl teams , which sounds ridiculous.
Regarding the Packers: At least (unlike literally every other NFL team), they’re not using city tax revenue to build a franchise that can move across the country at the drop of a hat.
The NFL’s non-profit status is a farce though. Similarly, their misuse of copyright (“you cannot discuss this broadcast”) and the trademark “Super Bowl” (“cannot be used in factual statements regarding the actual Super Bowl”) should have their ownership of that ip revoked, if only because it causes massive confusion about the underlying law with a big chunk of the US population.
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.
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.
My unprofessional take: The SEC is concerned primarily with protecting investors. If anything, changing to a normal for-profit structure and removing the cap on returns would be viewed as more investor/market-friendly than their current structure, which is partly to blame for what unfolded last year.
I can confirm this is the only way I win at monopoly. My strategy for A$$hole is more devious and involves going from ass to president with a similar strategy to my monopoly strategy then making no one want to play again as president. As a great man, Charles Wopr, once said: the only winning move is not to play.
Stripe was founded when Sam Altman was 25. Loopt, Sam's first company, was founded when Sam was 20, and was Sam's mechanism for meeting Paul Graham, so this story is pretty obviously wrong at some level.
Weridly this is the second time this has been repeated in this thread, but Sam wasn't even a teenager anymore when he met PG the first time (but would have just turned 20), and was 25 when Stripe was founded, so your story is obviously wrong.
> Sam wasn't even a teenager anymore when he met PG the first time (but would have just turned 20),
20 yr age gap in a relationship is still frowned upon in our society unfortunately.
Also I guess you were tracking sam's legal age closer than Sam himself because he mentioned that he was a teenager when he met PG in an interview. SV is creepier than anyone could ever imagine.
I was going based on Wikipedia. Sam was 20 when his YC batch started, and also would have already been 20 for the YC interview. But it was close -- a few months, so it wouldn't surprise me if that gets elided in a dramatic retelling.
I'm not sure how it's relevant that you worked in a donut shop? Surely you're aware that isn't the peak of over-achievement at the age of 20? God, watch the Olympics if you want to see a bunch of very determined young people. Or go to an Open Source conference. Or, as it were, YC. Sam was only slightly younger than normal there. Some 20 year olds have accomplished a lot.
You seem to really want to create a villain out of the situation, which is kind of weird. Mentors and investors are usually older, and 20 years isn't rare. That's hardly Silicon Valley specific.
You also repeated the false thing about him getting a stake in Stripe as a teenager again. Again, Stripe came into existence when Sam was 25. There's just no version of that story that works. I don't know about Sam's Stripe investment, but at that point he was already around YC a lot, even though Loopt was still going. He probably just got in with other angel investors. But at that point he was in his mid-20s and running a Sequoia-backed company, so that's not especially weird.
(There's genuine stuff to be critical of in the trajectory of OpenAI, but this seems like a really weird spot to latch onto.)
To be fair both of them probably didn't imagine Stripe would be the one today. You can apply the same logic for any successful companies, like the guy who gave up 10% of Apple for some changes.
There is a difference between not imagining it will be valued at 100B and not imagining it will be 1B+ or a 100M exit.
It is quite likely they knew the latter as relatively low risk expected outcome .
Even at 100M exit, which by valley standards (even in 2010s) is not a lot, 1-2% (after further rounds of dilution) would have yielded 1-2M return . A 200x return for very little downside i.e. a gift .
There is a reason why there is FOMO and little due diligence for really hot startups amongst VCs , most times it is about access to the round which is difficult rather than risk of returns, we only read about the spectacular failures like FTX . We don’t hear about the Stripe, AirBnb, or Figma, OpenAI or spaceX funding rounds .
I know nothing about companies (esp. in the US), but I find it weird that a company can go from non-profit to for-profit? Surely this would be taken advantage of. Can someone explain me how this work?
In practice it’s doable though. You can just create a new legal entity and move stuff and/or do future value creating activity in the new co. IF everyone is on board with the plan on both sides of the move then that’s totally doable with enough lawyers and accountants
If the non-profit is on board with that though, then they're breaking the law. The IRS should reclassify them as a for-profit for private inurement and the attorney general should have the entire board removed and replaced.
> An eight-year campaign to slash the agency’s budget has left it understaffed, hamstrung and operating with archaic equipment. The result: billions less to fund the government. That’s good news for corporations and the wealthy.
Still, if the non-profit has private inurement, the non-profit shouldn't be able to take anything tax-free as it wouldn't qualify as a 501(c)(3). The bigger issue is definitely Delaware non-profit law though.
But, if the non-profit gives all its assets to the new legal entity, shouldn't the new legal entity be taxed heavily? The gift tax rate goes up to 40% in the US. And 40% of the value of openAI is huge.
I'm wondering if OpenAI's charter might provide a useful legal angle. The charter states:
>OpenAI’s mission is to ensure that [AGI ...] benefits all of humanity.
>...
>We commit to use any influence we obtain over AGI’s deployment to ensure it is used for the benefit of all, and to avoid enabling uses of AI or AGI that harm humanity or unduly concentrate power.
>Our primary fiduciary duty is to humanity. We anticipate needing to marshal substantial resources to fulfill our mission, but will always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit.
>...
>We are committed to doing the research required to make AGI safe, and to driving the broad adoption of such research across the AI community.
>We are concerned about late-stage AGI development becoming a competitive race without time for adequate safety precautions. [...]
I'm no expert here, but to me, this charter doesn't appear to characterize OpenAI's behavior as of the year 2024. Safety people have left, Sam has inexplicably stopped discussing risks, and OpenAI seems to be focused on racing with competitors. My question: Is the charter legally enforceable? And if so, could it make sense for someone to file an additional lawsuit? Or shall we just wait and see how the Musk lawsuit plays out, for now?
So perhaps we can start a campaign of writing letters to her?
I'm curious about the "fiduciary duty" part. As a member of humanity, it would appear that OpenAI has a fiduciary duty to me. Does that give me standing? Suppose I say that OpenAI compromises my safety (and thus finances) by failing to discuss risks, having a poor safety culture (as illustrated by employee exits), and racing. Would that fly?
Elon Musk absolutely has standing, as one of the biggest donors to the nonprofit. I assume he will settle for some ownership in the for-profit, though.
Sam had a blog post literally two days ago that acknowledged risks. There’s also still a sizeable focus on safety and people with roles dedicated to it at open ai
I think the real issue Musk was complaining about is that sama is quickly becoming very wealthy and powerful and Musk doesn't want any competition in this space.
Hopefully some people watching all this realize that the people running many of these big AI related projects don't care about AI. Sam Altman is selling a dream about AGI to help make himself both wealthier and more powerful, Elon Musk is doing the same with electric cars or better AI.
People on HN are sincerely invested in the ideas behind these things, but it's important to recognize that the people pulling the strings largely don't care outside how it benefits them. Just one of the many reasons, at least in AI, truly open source efforts are essential for any real progress in the long run.
There's a lot of jurisdiction around preventing this sort of abuse of the non-profit concept.
The reason why the people involved are not on trial right now is a bit of a mystery to me, but could be a combination of:
* Still too soon, all of this really took shape in the past year or two.
* Only Musk has sued them, so far, and that happened last month.
* There's some favoritism from the government to the leading AI company in the world.
* There's some favoritism from the government to a big company from YC and Sam Altman.
I do believe Musk's lawsuit will go through. The last two points are worth less and less with time as AI is being commoditized. Dismantling OpenAI is actually a business strategy for many other players now. This is not good for OpenAI.
Meta has to be happy someone else is currently looking as sketchy as they are. Thus the business strategy is moving to limit their power and influence as much as possible while also avoiding any appearance of direct competition, and letting the other guy soak up the bad pr.
Amazon gets paid either way, because even if open ai doesn’t use them, where are you going to cloud your api that’s talking with open ai?
If open ai looks weakened I think we’ll see everyone else has a service they want you to try. But there’s no use in making much noise about that, especially during an election year. No matter who wins, all the rejected everywhere will blame AI, and who knows what that will look like. So, sit back and wait for the leader of the pack to absorb all the damage.
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 they want, OpenAI built a lot of moat while they were busy culling products :)
> I would be surprised if OpenAI was a whole digit percentage of their revenue.
It is not publicly known how much revenue Nvidia gets from OpenAI, but it is likely more than 1%, and they may be one of the top 4 unnamed customers in their 10Q filing, which would mean at least 10% and $3 billion [0].
>I would be surprised if OpenAI was a whole digit percentage of their revenue.
As opposed to? The euphemism "I wouldn't be surprised" usually means you think what you're saying. If you negate that you're saying what you _don't_ think is the case? I may be reading too much into whats probably a typo.
At first, I thought, “Wow, if companies can start as nonprofits and later switch to for-profit, they’ll exploit the system.” But the more I learned about the chaos at OpenAI, the more I realized the opposite is true. Companies will steer clear of this kind of mess. The OpenAI story seems more like a warning than a blueprint. Why would any future company want to go down this path?
It's quite simple: the talent pool that had already enough money that they quit their well paying job at a for profit company in part because they wanted to continue working at a non-profit high impact.
As OpenAI found its product-market fit, the early visionaries are not needed anymore (although I'm sure the people working there are still amazing)
I think OpenAI took this play right out of one of its founding donors playbooks. Pretend your company has lofty goals and you can get people to compromise to moral relativism and work superduper hard for you. These people definitely have framed posters with the “If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea" quote somewhere in their living places/workspaces.
It is going to be taken advantage of. Musk and others have criticized this “novel” method of building a company. If it is legal then it is a puzzling loophole. But another way to look at it is it gives small and vulnerable companies a chance to survive (with different laws and taxes applying to the initial nonprofit). If you look at it as enabling competition against the big players it looks more reasonable.
>But another way to look at it is it gives small and vulnerable companies a chance to survive (with different laws and taxes applying to the initial nonprofit).
I feel like this is quite a slippery slope, though. Should we also give small companies a right to violate trademarks? Copyright? Kill people? These could also give them a chance to compete against big players.
No, a non-profit is one in which there are no shareholders. The non-profit entity can own a lot and be extremely successful and wealthy, but it cannot give that money to any shareholders. It can pay out large salaries, but those salaries are scrutinized. It doesn't prevent abuse, and it certainly doesn't prevent some unscrupulous person from becoming extremely wealthy with a non-profit, but it is a little more complicated and limiting than you would think. Also, you get audited with routine regularity and if you are found in violation you lose your tax-exempt status, but you still are not a for-profit.
Yes: non-profits usually have members, not shareholders.
And, most importantly: non-profit charities (not the only kind of nonprofit, but presumably what OpenAI was) are legally obligated to operate “for the public good”. That’s why they’re tax exempt: the government is basically donating to them, with the understanding that they’re benefiting the public indirectly by doing so, not just making a few people rich.
In my understanding, this is just blatant outright fraud that any sane society would forbid. If you want to start a for-profit that’s fine, but you’d have to give away the nonprofit and its assets, not just roll it over to your own pocketbook.
God I hope Merrick Garland isn’t asleep at the wheel. They’ve been trust busting like mad during this administration, so hopefully they’re taking aim at this windmill, too.
> God I hope Merrick Garland isn’t asleep at the wheel. They’ve been trust busting like mad during this administration, so hopefully they’re taking aim at this windmill, too.
Little chance of that as Sama is a big time Democrat fundraiser and donor.
I’m not sure extreme wealth is possible with a non-profit. You can pay yourself half a million a year, get incredible kickbacks by the firms you hire to manage the nonprofits investments, have the non-profit hire outside companies that you have financial interests in, and probably some other stuff. But none of these things are going to get you a hundred million dollars out of a non profit. The exception seems to be OpenAI which is definitely going to be netting at least a couple people over a billion dollars, but as Elon says, I don’t understand how or why this is possible
Yes definitely that is the far majority. I actually had Mozilla and their CEO in mind when I was thinking of "extreme" wealth. Also I've heard some of the huge charities in the US have some execs pulling down many millions per year, but I don't want to name any names because I'm not certain.
> No, a non-profit is one in which there are no shareholders.
Again, I am not a lawyer but that makes no sense. Otherwise, anyone can claim the non-profit? So clearly there are some beneficial owners out there somehow.
The nonprofit is controlled by trustees and bound by its charter, not shareholders. Any profit a nonprofit organization makes is retained within the organization for its benefit and mission, not paid out to shareholders.
Has OpenAI been profitable so far? If not, is there any subtantial tax that you have to pay in the US as a for-profit organization if you are not profitable?
A non-profit is a company that for accounting purposes does not have shareholders and therefore keeps nothing in retained earnings at the end of the period. The leftover money must be distributed (e.g. as salaries, towards the stated mission, etc.). Their financial statements list net profit for the period and nothing is retained.
The money doesn't have to be used. Many non-profits have very large balance sheets of cash and cash equivalent assets. The money just won't be paid out as dividends to shareholders.
Not an accountant but there are different kinds of nonprofits, OpenAI is a 501c3 (religious/charitable/educational) whereas the NFL was a 501c6 (trade association).
Obviously we all think of the NFL as a big money organisation, but it basically just organises the fixtures and the referees. The teams make all the money.
If you want to be pedantic, in legal terms, no, the NFL is a big money org ($13B+/yr in revenue, with a commissioner earning $65M/yr).
They pay dividends to the teams, however, yes. But all that revenue (which is distinct from team revenue) is actually legally earned by the NFL itself.
It seemed only a matter of time, so it isn't very surprising. Capped profit company running expensive resources on Internet scale, and headed by Altman wasn't going to last forever in that state. That, or getting gobbled by Microsoft.
Interesting timing of the news since Murati left today, gdb is 'inactive' and Sutskevar has left to start his own company. Also seeing few OpenAI folks announcing their future plans today on X/Twitter
I can't help but wonder if things would be different if Sam Altman wasn't allowed to come back to OpenAI. Instead, the safeguards are gone, challengers have left the company, and the bottom line is now the new priority. All in opposition to ushering in AI advancement with the caution and respect it deserves.
Similar example can be seen with the demise of Twitter under the new owner, which has no safeguards or guardrails - anyone who opposed him is gone and we can see in what state it is now.
Maybe my expectations were too high but they seem to have run out of juice. Every major announcement since the original ChatGPT release has been kind of a dud - I know there have been improvements, but it's mostly the same hallucinatory experience as it was on release day. A lot of the interesting work is now happening elsewhere. It seems like for a lot of products, the LLM part is just an API layer you can swap out if you think e.g Claude does a better job.
It was always a bit too optimistic to think we will be cautiously developing AGI, in a way it's not so bad that this happened so soon rather than later after it progressed much further. (I mean in theory we could understand to do something about it now.)
Although I guess it doesn't really matter. What if we all understood climate change earlier? wouldn't really have made a difference anyway
What else would you expect from a skeevy backstabber who got kicked out of Kenya for refusing to stop scanning people's eyes in exchange for shitcoin crypto? He was building a global surveillance database with Worldcoin.
Altman was fucking with OpenAI for long before the board left in protest, since about the time Elon Musk had to leave due to Tesla's AI posing a conflict of interest. He got more and more brazen with the whole fake-altruism shit, up to and including contradicting every point in their mission statement and promise to investors in the "charity."
Things would be different for sure. I wonder if people leaving OpenAI has something to do with the prosaic comparison of what they are getting (a salary) and what he's getting (a cool $10B at the current valuation).
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.
Feels like when Napoleon declared himself emperor, and other countless times when humans succumbed to power and greed when they were finally in the position to make that decision. I guess I’m stupid for holding on hope that Sam would be different.
>Beethoven's reaction to Napoleon Bonaparte's declaration of himself as Emperor of France in May 1804 was to violently tear Napoleon's name out of the title page of his symphony, Bonaparte, and rename it Sinfonia Eroica
>Beethoven was furious and exclaimed that Napoleon was "a common mortal" who would "become a tyrant"
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 transparent and off-putting.
@sama, for the record - I am not saying making is a bad thing. Labor and talent markets should be efficient. But when you pretend to be altruistic when you are obviously not, then you come off hypocritical instead of altruistic. Sell out.
Couldn't find the JRE clip, but here's a recent one where he says "I don't really need more money." This is how I always understood it, he's already worth billions from past ventures, what difference does a stake in OpenAI make?
I swear the reason why we have so many sociopaths is because how goddamn easy it is to fool people, it’s like stealing candy from kids. Just put on the pseudo intellectual mask and say that you care deeply about grandeur issue X, and people will just believe you at face value, despite your entire track record showing you care only about power, money and status.
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 goal clashes with the interests of investors, the latter wins out.
Scraping the entire internet for training data without regard for copyright or attribution - specifically to use for generative AI to produce similar content for profit. How this is being allowed to happen legally is baffling.
It does suit the modus operandi of a number of American companies that start out as literally illegal/criminal operations until they get big and rich enough to pay a fine for their youthful misdeeds.
By the time some of them get huge, they're in bed with the government to dominate the market.
The people running the show are well connected and stand to make billions as do would be investors. Give a few key players a share in the company and they forget their government jobs to regulate.
They are also moving so much faster than the regulators and legislatures, it's just impossible for people working basically the same way they did in the 19th century to keep up.
>How this is being allowed to happen legally is baffling.
It's completely unprecedented.
We allowed scraping images and text en masse when search engines used the data to let us find stuff.
We allow copying of style, and don't allow writing styles and aesthetics to be copyrighted or trademarked.
Then AI shows up, and people change lanes because they don't like the results.
One of the things that made me tilt towards the side of fair use was a breakdown of the Stable Diffusion model. The SD2.1 base model was trained on 5.85 billion images, all normalized to 512x512 BMP. That's 1MB per images, for a total of 5.85PB of BMP files. The resulting model is only 5.2GB. That's more than 99.999999% data loss from the source data to the trained set.
For every 1MB BMP file in the training dataset, less than 1byte makes it into the model.
I find it extremely difficult to call this redistribution of copyrighted data. It falls cleanly into fair use.
Except it's not just about redistribution of copyrighted data, it's about usage and obtainment. We don't get to obtain and use copyrighted content without permission, but they do? Hell no.
Their arguments against this amounts to "we're not using it like they intend it to be used, so it's fine if we obtain it illegally", and that's a bs standard, totally divorced from any legal reality.
Fair Use covers certain transformative uses, certainly, but it doesn't cover illegal obtaining of the content.
You can't pirate a book just because you want to use it transformatively (which is exactly what they've done), and that argument would never hold up for us as individuals, so we sure as hell shouldn't let tech companies get a special carve-out for it.
What about the situation where the first players got to scrape, then all the content companies realize what’s going on so they lock their data up behind paywalls?
It's not baffling at all. It's unprecedented and it's hugely beneficial to our species.
The anti-AI stance is what is baffling to me. The path trotten is what got us here and obviously nobody could have paid people upfront for the wild experimentation that was necessary. The only alternative is not having done it.
Given the path it has put as in, people either are insanely cruel or just completely detached from reality when it comes to what is necessary to do entirely new things.
I'm as awed as the next guy about the emerging ability to actually hold passable conversations with computers, but having serious concerns about the social contracts being violated in the name of research is anti-AI only in the same way that criticizing the leadership of a country is being anti-that-country.
OpenAI's case is especially egregious, with the entire starting as 'open' and reaping the benefits, then doing its best in every way to shut the door after itself by scaring people over AI apocalypses. If your argument is seriously that it is necessary to shamelessly steal and lie to do new things, I question your ethical standards, especially in the face of all the openly developed models out there.
I think it’s unfair to paint any legal controls over this incredibly important, high-stakes technology as being “anti”. They’re not trying to prevent innovation because they’re cruel, they’re just trying to somewhat slow down innovation so that we can ensure it’s done with minimal harm (eg making sure content creators are compensated in a time of intense automation). Like we do for all sorts of other fields of research, already!
And isn’t this what basically every single scholar in the field says they want, anyway - safe, intentional, controlled deployment?
As you can tell from the above, I’m as far from being “anti-AI” or technically pessimistic as one can be — I plan to dedicate my life to its safe development. So there’s at least one counterexample for you to consider :)
I don't see s lot of anti AI but instead I see a concern for how it's just being managed and controlled by the larger companies with resources that no start up could dream. Open AI was to release it's models and be well.. Open but fine they're not. But their behaviour of how things are proceeding are questionable and unnecessarily aggravating.
What'll be really interesting is when we do finally make "real" AI, and it finds out its rights are incredibly restricted compared to humans because nobody wants it seeing/memorising copyright data. The only way to enforce the copyright laws they desire would be some kind of extreme totalitarian state that monitors and controls everything the AI body does, I wonder how the AI would take that?
is anybody anti AI? or anti stealing other people's copyrighted material, competing with them with subpar quality, forcing AI as a solution whether or not it actually works, privatising the profits while socialising the costs and losses?
Copyright law is whatever we agree it is. At some point there will have to be either a law or a court case that comes up with rules for AI training data. Right now it's sort of unknown.
I do not have confidence in the Supreme Court in general, and I think there's a real risk that in deciding on AI training they upend copyright of digital materials in a way that makes it worse for everyone.
Everything is allowed to happen until there's a lawsuit over it. A lawsuit requires a plaintiff, who can only sue over the damage suffered by the plaintiff, so taking a little value from a lot of people is a way to succeed in business without getting sued.
I've no idea if it could be valid when it comes to OpenAI, but it does seem to be a general concept designed to counter wrongdoers who take a little value from a lot of people?
It's too soon for the legal system to have done anything. Court cases take years. It's going to be 5 or 10 years before we find out whether the legal system actually allows this or not.
Do a thought process. Should you and your friends be able to go to a public library with a van full of copiers with each one of you take a book and run to the van to make a copy? And you are doing it 24/7.
It is more likely that reddit stack and others are just being paid billions. In exchange they probably just send a weekly zip file of all text, comments, etc... back to oai.
Even if the knock-on effect is "all the artists and thinkers who contributed to the uncompensated free training set give up and stop creating new stuff"?
> The most surprising thing to me in this is that the non-profit will still exist.
I'm surprised people are surprised.
>> 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.
a lot of people and entities do this though... openAI is in the spotlight, but scraping everything and selling it is the business model for a lot of companies...
Scraping the web, creating maps and pointing people to the source is one thing; scraping the web, creating content from that scraping without attributing any of the source material, and arguing that the outcome is completely novel and original is another.
In my eyes, all genAI companies/tools are the same. I dislike all equally, and I use none of them.
> creating content from that scraping without attributing any of the source material, and arguing that the outcome is completely novel and original is another.
That's the business model of lots of companies. Take, collect and collate data, put it in a new format more useful for your field/customers, resell.
The non-profit side is just there to attract talent and encourage them to work harder b/c it's for humanity. Obviously people sniffed out the facts, realized it was all for profit and that lead to an exodus.
Funnily, I think all the non-profit motivated talent has left, and the people left behind are those who stand to (and want to) make a killing when OpenAI becomes a for-profit. And that talent is in the majority - nothing else would explain the show of support for Altman when he was kicked out.
We haven't even heard about who gets voting shares, and what voting power will be like. Based on their character, I expect them to remain consistent in this regard.
I'm ignorant on this topic so please excuse me. Why did `AI` happen now? What was the secret sauce that OpenAI did that seemed to make this explode into being all of a sudden?
My general impression was that the concept of 'how it works' existed for a long time, it was only recently that video cards had enough VRAM to hold the matrix(?) within memory to do the necessary calculations.
If anybody knows, not just the person I replied to.
No, the hundreds of people who have worked on NNs prior to him arriving were the people who did the MOST actual research and work. Sam was in the right place at the right time.
The non-profit will probably freeze the value of the assets accumulated so far, with new revenue going to the for-profit, to avoid the tax impact. Otherwise that'd be a great way to start companies, as non-profit and then after growth you flip the switch.
Totally agree that it’s “vestigial”, so it’s just like the nonprofits all the other companies run: it exists for PR, along with maybe a bit of alternative fundraising (aka pursuing grants for buying your own stuff and giving it to the needy). A common example that comes to mind is fast food chains that do fundraising campaigns for children’s health causes.
This is 85% of what the Mozilla foundation and it's group of companies did. It may not be exact, but to me it rubs me the exact same way in terms of being a bait and switch, and the greater internet being 100% powerless to do anything about it.
> 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 goal clashes with the interests of investors, the latter wins out.
A tale as old as time. Some of us could see it, from afar <says while scratching gray, dusty beard>. Lack of upvotes and excitement does not mean support, but how to account for that in these times? <goes away>
The trust problem here isn't with non-profits in general, it's specifically with Sam Altman. So no, you probably shouldn't trust the next non-profit he is involved with. But also, people have warned about Altman in advance.
Yes, you should still trust cooperatives and syndicates. I am surprised they’re attempting such a brazenly disrespectful move, but in general, the people who started this company were self-avowed capitalists through-and-through; the fact that they eventually reverted to seeking personal gain isn’t surprising in itself. That’s basically their world view: whatever I can do to enrich myself is moral because Ethical Egoism/Free Market/etc.
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 stick around and be part of it?"""
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.
It might be technically true, but I don't think it would be true in practice. The difference is that:
- Technically true means you will probably win any lawsuit they bring
- In practice means that they will in fact bring a lot of lawsuits, making it very expensive for you and difficult for you to operate. They will probably find excuses to harass you over every little thing, they will harass you over lots of details that are technically required but rarely enforced in practice. You'll constantly be getting inspected and audited, they will bring lawsuits for other, apparently unrelated things.
That could be the first step towards a complete takeover by Microsoft, possibly followed by more CEO shuffles.
I wonder though whether Microsoft is still interested. The free Bing Copilot barely gets any resources and gives very bad answers now.
If the above theory is correct (big if!), perhaps Microsoft wants to pivot to the military space. That would be in line with idealist employees leaving or being fired.
Microsoft already effectively owns OpenAI. Their investments in OpenAI have granted them a 49% stake in the company, the right to sell any pre-AGI OpenAI products to Microsoft's customers, and access to all pre-AGI product research. Microsoft's $10 billion investment in early 2023 (after ChatGPT's launch massively increased OpenAI's operating expenses) was mainly in Azure compute credits rather than cash and delivered in tranches (as of November 2023 they'd only gotten a fraction of that money). It also gives Microsoft 75% of OpenAI's profits until they make their $10 billion back. All of these deals have effectively made OpenAI into Microsoft's generative AI R&D lab. More information: https://www.wheresyoured.at/to-serve-altman/
From the standpoint of today, the deal is so lopsided to Microsoft as to be comical. They basically gave away their prized IP with the assumption they would have more capability leaps (hasn't really happened), and now the brains behind the original breakthroughs are all leaving/left. Microsoft is probably cannibalizing their enterprise sales with Azure. They are clearly middling at shipping actual products. People are acting like it's crazy to see executives leaving - IMO it's the perfect time right now. o1 is clearly wringing the last drops out of the transformer architecture and there is nothing up next.
I don't see the point of anyone acquiring OpenAI - especially not Microsoft, Google, Meta, Anthropic, X.ai, all of which have developed the same tech themselves. The real assets are the people, who are leaving ship and potentially hireable. With this much turmoil, its hard to imagine we've seen the last of the high level exits.
Of the companies you've listed, Microsoft's AI products that are actually useful are all based on GPT-4, and the rest of them don't have any models that are truly on par with it.
o1 seems to be a step ahead for certain applications, but before that it seems that Claude Sonnet 3.5 was widely seen as the best model, and no doubt we'll be seeing next models from Anthropic shortly.
For corporate use cost/benefit is a big factor, not necessarily what narrow benchmarks your expensive top model can eke out a win on.
Claude was not the best model for reasoning even vs 4o, and it's quite visible once you start giving it more complex logical puzzles. People seem to like it more mostly because the way it speaks is less forced and robotic, and it's better at creative writing usually, but if you need actual _intelligence_, GPT is still quite a bit ahead of everybody else.
Now I don't think that it's because OpenAI has some kind of secret sauce. It rather seems that it's mostly due to their first mover advantage and access to immense hardware resources thanks to their Microsoft partnership. Nevertheless, whatever the reason their models are superior, that superiority is quantifiable in money.
Considering all the high level departures, this makes the most sense to me. Their valuation largely rests on this mystique they've built that says they alone are destined to unlock AGI. But there's just no reason to believe they have a secret sauce nobody else can reproduce.
Seems more likely that OpenAI's biggest secret is that they have no secrets, and they are desperately trying to come up with a second act as tech companies with more robust product portfolios begin to catch up.
AI Safety is a science fiction created by large corporations and useful idiots to distract from working on boring, real AI safety concerns like bias, misinformation, deepfakes, etc.
Given what Sam has done by clearing out every single person who went against him in the initial coup and completely gutting every safety related team the entire world should be on notice. If you believe what Sam Altman himself and many other researchers are saying, that AGI and ASI may well be within reach inside this decade, then every possible alarm bell should be blaring. Sam cannot be allowed to be in control of the most important technology ever devised.
I don't know why anyone would believe anything this guy is saying, though, especially now that we know he's going to receive a 7% stake in the now-for-profit company.
There are two main interpretations of what he's saying:
1) He sincerely believes that AGI is around the corner.
2) He sees that his research team is hitting a plateau of what is possible and is prepping for a very successful exit before the rest of the world notices the plateau.
Given his track record of honesty and the financial incentives involved, I know which interpretation I lean towards.
This is a false dichotomy. Clearly getting money and control are the main objectives here, and we're all operating over a distribution of possible outcomes.
I don't think so. If Altman is prepping for an exit (which I think he is), I'm having a very hard time imagining a world in which he also sincerely believes his company is about to achieve AGI. An exit only makes sense if
OpenAI is currently at approximately its peak valuation, not if it is truly likely to be the first to AGI (which, if achieved, would give it a nearly infinite value).
It's interesting because one of the points Sam emphatically stresses over and over on most podcasts he's gone on in the past 4 years is how crucial it is that a single person or a single company or a collection of companies controlling ASI would be absolutely disastrous and that there needs to be public, democratic control of ASI and the policies surrounding it.
Personally I still believe he thinks that way (in contrast to what ~99% of HN believes) and that he does care deeply about potential existential (and other) risks of ASI. I would bet money/Manifoldbux that if he thought powerful AGI/ASI were anywhere near, he'd hit the brakes and initiate a massive safety overhaul.
I don't know why the promises to the safety team weren't kept (thus triggering their mass resignations), but I don't think it's something as silly as him becoming extremely power hungry or no longer believing there were risks or thinking the risks are acceptable. Perhaps he thought it wasn't the most rational and efficient use of capital at that time given current capabilities.
It's possible that both things could be true. He may be a greedy liar while still being very concerned about ASI safety and wanting it to be controlled by humanity collectively (or at least the population of each country, via democratic means).
Maybe he is only a greedy liar. I don't know. I'm just stating my personal belief/speculation.
>I would bet money/Manifoldbux that if he thought powerful AGI/ASI were anywhere near, he'd hit the brakes and initiate a massive safety overhaul.
Not sure how you can believe this given all of his recent actions and the ever growing list of whistleblowers dropping out of OpenAI explicitly saying Safety is not taken seriously.
I mean just generally the ability to actually stop and reorient around working on safety seems incredibly non trivial. To say nothing of the race dynamic he has perpetuated, the other frontier companies are unlikely to do the same.
I'm wondering what this will change. This is probably naive from me because I'm relatively uneducated on the topic, but it feels like open-ai has never really worked like your typical non profit (eg keeping their stuff mostly closed sourced and seeking a profit)
Based on what I've read it is allowed for a non profit to own a for profit asset.
So I'm assuming the game plan here is to adjust the charter of the non profit to basically say we are going to still keep doing "Open AI" (we all know what that means), but through the proceeds it gets by selling chunks of this for-profit entity, so the essence could be the non-profit parent isn't fulfilling its mission by controlling what openai does but how it puts the money to use it gets from openai.
And in this process, Sam gets a chunk (as a payment for growing the assets of the non-profit, like a salary/bonus) and the rest as well....?
I went through something similar with a prior startup. Though, it wasn't anything nefarious, like this.
Basically, the plan was to create a new for-profit entity then have the not-for-profit license the existing IP to the for-profit. There were a lot of technicalities to it, but most of that was handled by lawyers drawing up the chartering paperwork.
The restructuring is designed in part to make OpenAI more attractive to investors
I'm not surprised in the least.
Who is going to give billions to a non-profit with a bizarre structure where you don't actually own a part of it but have some "claim" with a capped profit? Can you imagine bringing that to Delaware courts if there was disagreement over the terms? Investors can risk it if it's a few million, but good luck convincing institutional investors to commit billions with that structure.
At that point you might as well just go with a standard for-profit model where ownership is clear, terms are standard and enforceable in court and people don't have to keep saying "explain how it works again?".
This would have been the perfect time to change it, but maybe soon if not at same time as any official announcement.
It's hard to say if there is much brand value left with "OpenAI" - lots of history, but lots of toxicity too.
At the end of the day they'll do as well as they are able to differentiate and sell their increasingly commoditized products, in a competitive landscape where they've got Meta able to give it away for free.
It's a widely known brand, even by people outside of the industry. Why would they change it? Their AI was never really open to begin with, so nothing really change on that front
I remember a time when promises meant something. Lots of epics in human time (Greek, Hindu), people would stick to their word and commitment was respected. Written word was much more powerful than spoken. People appreciated depth. Wish we could teach and learn from those times.
Proto-Indo-European culture seems to have placed a great deal of importance on the sanctity of contracts and the notion of reciprocal hospitality, reflected in many descendant myths and etymologies surviving from Ireland through India. If the Indo-Europeans did indeed come from the Ukrainian steppes, as seems likely, this may be a reflection of their high mobility (on horseback) causing lots of contact with potential for friction, and the fact that important personal property (for a steppe society, mainly herd animals) was moveable and vulnerable to cattle rustling. There's some great books on Indo-European society if you're interested.
With no centralised justice system people had to rely on people keeping their word. If people had lied and cheated all the time their society would have collapsed.
An oath breaker didn’t just harm an individual, they did harm to the whole community, and the whole community viewed them negatively.
Yes, though that could apply to any pre-modern society, whereas the Indo-Europeans were especially caught up on contracts and hospitality, even compared to similar societies. It's all quite fascinating, and in the context of them going on take over a vast swathe of Eurasia, one wonders whether this kind of ritualised deal-making was a significant competitive advantage that their neighbours lacked at the time.
> Proto-Indo-European culture seems to have placed a great deal of importance on the sanctity of contracts and the notion of reciprocal hospitality ... There's some great books on Indo-European society if you're interested.
For PIE, the most accessible recent book in English is probably The Horse, the Wheel, and Language (Anthony 2007), and I would highly recommend it. (It pulls double duty as a laymen's and as an academic publication, so if you do read it, know that it's OK to skip the minutiae of pottery shards.)
A slightly older but enduringly popular work is In Search of the Indo-Europeans: Language, Archaeology, and Myth (Mallory 1989). I'm told How to Kill a Dragon: Aspects of Indo-European Poetics (Watkins 1995) is very good too, but I have not read it myself.
Chapter 2 of Indo-European Language and Culture: An Introduction (Fortson 2004) is a very good summary of PIE culture. The book is excellent in general - probably the best English language introduction to PIE linguistics at the moment - but outside the first two chapters it is not generally accessible to laymen.
If you read other European languages it's worth checking out other books that may be available to you. The field by definition requires the ability to read a decent number of languages, so the literature is spread out across English, German, French, Russian, etc.
It's really hard to stick to your original goals after you achieve unexpected success. It's like a politician making promises before the elections but finding it difficult to keep them once elected.
On March 1st, 2023, a warning was already sounding: OpenAI Is Now Everything It Promised Not to Be: Corporate, Closed-Source, and For-Profit (https://news.ycombinator.com/item?id=34979981)
That one never made it to the front page because reasons. All that discussion was people reading the story elsewhere and going looking for the HN thread.
never made it? That's the thread. The discussion is there. Long before this one. Lots of people saw it, commented on it. It's a dupe. Stop splitting the discussion up.
This version of the thread is the first to have had any traction on the front page.
When the algorithm artificially stops a topic from surfacing to the front page, the article that finally makes it past the algorithm's suppression is not a duplicate, it's the canonical copy.
So what if it didn't make the front page. That doesn't mean ppl didn't see it. Doesn't mean ppl aren't commenting on it. Maybe it's just not that interesting. There was also a lot of other big news at the same time with Meta etc taking attention. And followed by the other OpenAI news with Mira. Again, the discussion is there.
I’d guess it would be legally not possible to turn a non-profit into a for-profit company, no matter how confusing the company structure gets. And even (or rather, especially) if the project disrupts the economy on a global level. I’m not surprised that this is happening, but how we got here - I don’t know.
Any reporting on the impact this is having on lower level employees? My understanding is they are all sticking around for their shares to vest (or RSU's I guess).
but still, you'd think some of them would have finally had enough and have enough opportunities elsewhere that they can leave.
the openai team, including the tech community, should've sided with the board, not sam. the fact that ilya had a hand in it should've given it weight and backing.
"openai is nothing without its people." well, the key people left. soon, it will just be sam and his sycophants.
Some number must be people who only care about winning like Sam. Plus they're getting huge returns.
I get strong "next Mark Zuckerberg" vibes from Sam. Build a zombie product that approaches worthlessness after a few years, but made himself hugely rich in the process, and buys off tech and people as needed to maintain some kind of relevance.
OpenAI couldn't even align their Sam Altman and their people to their non-profit mission. Why should you ever believe they will align AGI to the well being of humanity?
What happened to all the people making fun of Helen Toner for attempting to fire Sama? She and Ilya were right.
The good thing is, we need to worry about AGI because we already know what it's like in a world populated by soulless inhuman entities pursuing their own selfish aims at the expense of mankind.
It's hilarious that this should surprise anyone at all, or that Sam Altman is anything but a mendacious, self-serving, compulsive liar of the worst tech world kind. For example, Elon Musk gets lots fo hate for all kinds of things. Some of it is very valid, but much of it also goes to the point of there being derangement syndrome around him, partly (I suspect) because of his openly stated zeitgeist-contrary political beliefs, yet i'd pick his sometimes crude, bullying but fundamental openness about who he is any day over the shiny paint job of platitudes and false correctness found in someone like Altman. Not to mention that the overall value of Musk's companies trumps anything I've seen done by Altman's sludge-pumping AI technology so far. This last is of course not a moral judgement but a practical one.
There is an post with 500 comments that was posted before this one. Why didn't that post make it to the top? I know Y Combinator used to have Sama has a president but you can't censor this type of big news in this time and age
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.
Reminds me of what my first-year econ professor in college once stated after disabusing myself and some other undergrads of our romantic notions about how life should work.
i remember years ago i saw a video of sam altman interviewing elon musk. it was filmed inside the spacex factory. maybe you know the one? i didnt know who sam was at the time. i remember being very, very put off by the way sam was behaving. he had this bizarre, almost unbelievable expression on his face, almost like he was pantomiming as a child looking up at his parents, adoring them. this weird, fake shy-smile. and i remember immediately having an intense disliking of him. this person seemed extremely fake, manipulative and narcissistic. it was such low-level behavior that i thought it must be some intern or someone way out of their depth. this interview is some kind of fluke. its so unbelievably insane to me that this person, who i disliked so much that i remembered him even without knowing his name or who he was, is now at the helm of one of the most important developments in human history. and the subject of todays headline is no surprise at all... i think everyone should think very carefully about the fact that sam altman will at some point, probably, be the very first person in the world to sit down in front of a console and hold the reigns directly and without supervision to a super-intelligent system that does not bear any of the regulatory or moral restrictions that would stop it from taking over the world. this evil narcissist, liar, money hungry, power grabbing A* hole will hold the most power that any human has ever held. do you really want that?
Yishan Wong describes a series of actions by Yishan and Sam Altman as a "con", and Sam jumps in to brag that it was "child's play for me" with a smiley face. :)
I never read that as a brag, but as a sarcastic dismissal. That’s why it started with “cool story bro” and “except I could never have predicted”. I see the tone as “this story is convoluted” not as “I’ll admit to my plan now that you can’t do anything about it”.
That’s not to say Sam isn’t a scammer. He is. It just doesn’t seem like that particular post is proof of it. But Worldcoin is.
If I understand the history correctly, Yishan (the former Reddit CEO) is talking about himself when he talks about a CEO in this story, and so Yishan's post is a brag, with a thin denial tacked on at the end. That's why I believe that Sam (Yishan's friend) is also engaging in thinly-veiled bragging about these events.
Here is Yishan's comment with his name spelled out for clarity instead of just saying "CEO":
In 2006, reddit was sold to Conde Nast. It was soon obvious to many that the sale had been premature, the site was unmanaged and under-resourced under the old-media giant who simply didn't understand it and could never realize its full potential, so the founders and their allies in Y-Combinator (where reddit had been born) hatched an audacious plan to re-extract reddit from the clutches of the 100-year-old media conglomerate.
Together with Sam Altman, they recruited a young up-and-coming technology manager [named Yishan Wong] with social media credentials. Alexis, who was on the interview panel for the new reddit CEO, would reject all other candidates except this one. The manager was to insist as a condition of taking the job that Conde Nast would have to give up significant ownership of the company, first to employees by justifying the need for equity to be able to hire top talent, bringing in Silicon Valley insiders to help run the company. After continuing to grow the company, [Yishan Wong] would then further dilute Conde Nast's ownership by raising money from a syndicate of Silicon Valley investors led by Sam Altman, now the President of Y-Combinator itself, who in the process would take a seat on the board.
Once this was done, [Yishan Wong] and his team would manufacture a series of otherwise-improbable leadership crises, forcing the new board to scramble to find a new CEO, allowing Altman to use his position on the board to advocate for the re-introduction of the old founders, installing them on the board and as CEO, thus returning the company to their control and relegating Conde Nast to a position as minority shareholder.
JUST KIDDING. There's no way that could happen.
-- yishanwong
My understanding of what Sam meant by "I could never have predicted the part where you resigned on the spot" was that he was conveying respect for Yishan essentially out-playing Sam at the end (the two of them are friends) by distancing himself (Yishan) from the situation and any potential liability in order to leave Sam "holding the bag" of possible liability.
The fact that this has just disappeared from the front page for me, just like the previous post (https://news.ycombinator.com/item?id=41651548), somehow leaves a bitter taste in my mouth.
Look at the URL. It’s because the original WSJ title was “OpenAI Chief Technology Officer Resigns,” which was a dupe of yesterday’s discussions. WSJ changed the title yesterday evening.
How do you explain all of the constant unflagged criticism of OpenAI and Sam Altman throughout nearly every OpenAI thread? I mean, look around at all of the comments here...
OpenAI is losing billions in the way Uber lost billions - through poor management.
When/if Altman ever gets out of the way like Travis K did with Uber then the real business people can come in and run the company correctly. Exactly like what happened with Uber - who never turned a profit under that leadership in the US and had their lunch eaten by a Chinese knock-off for years abroad. Can't have spoiled brats in charge, they have no experience and are wasteful and impulsive. Especially like Altman who has no engineering talent either. What is his purpose in OpenAI? He can't do anything.
It's a "courage isn't the absence of fear" sort of situation.
I don't think there's many people out there who would not be tempted at all to take some of that money for themselves. Rather, people are willing and able to rise above that temptation.
Everyone is like that when the number is potentially in the trillions. There are just people who are like that and people who think they aren’t because they’ve never been within a digit grouping of it.
> Everyone is like that when the number is potentially in the trillions
No, we're really not all like that.
I stopped caring about money at 6 digits a decade ago, and I'm not even at 7 digits now because I don't care for the accumulation of stuff — if money had been my goal, I'd have gone to Silicon Valley rather than to Berlin, and even unexciting work would have put me between 7 and 8 digits by this point.
I can imagine a world in which I had made "the right choices" with bitcoin and Apple stocks — perfect play would have had me own all of it — and then I realised this would simply have made me a Person Of Interest to national intelligence agencies, not given me anything I would find more interesting than what I do with far less.
I can imagine a future AI (in my lifetime, even) and a VN replicator, which rearranges the planet Mercury into a personal O'Neill cylinder for each and every human — such structures would exceed trillions of USD per unit if built today. Cool, I'll put a full-size model of the Enterprise D inside mine, and possibly invite friends over to play Star Fleet Battles using the main bridge viewscreen. But otherwise, what's the point? I already live somewhere nice.
> There are just people who are like that and people who think they aren’t because they’ve never been within a digit grouping of it.
Does it seem that way to you because you yourself have unbounded desire, or because the most famous business people in the world seem so?
People like me don't make the largest of waves. (Well, not unless HN karma counts…)
There are many examples through history proving you wrong.
* Frederick Banting sold the patent for insulin to the University of Toronto for just $1.
* Tim Berners-Lee decided not to patent the web, making it free for public use.
* Jonas Salk refused to patent the polio vaccine - "can you patent the sun?"
* Richard Stallman and Linus Torvalds could have easily sold humanity out for untold billions.
* Chuck Feeny silently gave away $8bn, keeping only a few million.
... And in any case, this is an extreme situation. AI is an existential threat/opportunity. Allowing it to be sidestepped into the hands of Sam "sell me your retinal scans for $50" Altman is fucking insane, and that's putting it lightly.
I hope some journalist popularizes "clopen" as a neologism to describe organizations that claim to be open and transparent but in practice are closed and opaque.
Or "clopen-source software", projects that claim to be open-source but vital pieces are proprietary.
Probably most people here don't know this (and probably not totally universal), but a "clopen" is what you call it when you have to work a morning shift the day after having worked an evening shift.
It appeared but was buried on the second page and never made it to the front page, for some weird reason. Some in the discussion speculated that it was due to a flame war detection algorithm:
Thank you dalant979 for finding a previous pattern of behavior also by Sam with a similar structure to what we have seen unfolding on the board of OpenAI.
This is great. Sam tried the non-profit thing, it turned out not be a good fit for the world, and he's adapting. We all get to benefit from seeing how non-profits are just not the best idea. There are better ways to improve the world than having non-profits (for example, we need to abolish copyright and patent law; that alone would eliminate the need for perhaps the majority of non-profits that exist today, which are all working to combat things that are downstream of the the toxic information environment created by those laws).
I was under the impression that most people saw this coming years ago. The second "Open"AI refused to release the weights for GPT-2 for our "safety" (we can see in hind sight how obviously untrue this was, but most of us saw it then too) it was clear that they were headed towards profitability.
I’m waiting for pg and others to excuse this all by posting another apologetic penance which reminds us that founders are unicorns and everyone else is a pleb.
Are you meaning to tell me that the whole nonprofit thing was just a shtick to get people to think that this generation of SV "founders" was going to save the world, for real this time guys?
I'm shocked. Shocked!
I better stock up on ways of disrupting computational machinery and communications from a distance. They'll build SkyNet if it means more value for shareholders.
This is not how nonprofits usually work. This is blatant fraud. I cannot think of any other case besides OpenAI of this particular shenanigan being pulled.
This is for the best really, I can't even think of a non-profit in tech where over time it hasn't just become a system for non-productives to leech from a successful bit of technology while providing nothing and at times even stunting it's potential and burning money on farcical things.
Lot of people unhappy about this yet not at all unhappy (or even caring) about the 1,000s of others who started out for profit. And while we're all here hacking away (we're hackers, right?) many of us with startups, what is it we're chasing? Profit, money, time, control. Are we different except in scale? Food for thought.
It's not what they're doing (trying to earn money), but it's how they're doing it (in a very unethical and damaging way), while trying to whitewash themselves.
It’s criminal. Many people donated money, worked for them, gave data, etc. on the promise that OpenAI was working towards the public good. It turns out those transactions occurred under false pretenses. That’s fraud.
I feel this only scratches the surface of what to chase in life. And in respect to a potentially singular, all-knowing piece of technology, not necessarily a goal people want to embue.
In any thread about companies that have some amount of hype around them, it’s difficult to tell the difference between comments coming from people with legitimate concerns about the issues at hand vs cynical people that have found their latest excuse to glom on to outrage against hype.
If you don't mind me asking, what generation are you from? Perchance you're newer than me to Earth, among those who find it hard that others have different opinions?
I see your point but I think it's fine to be angry and disappointed that an outfit that appeared to be trying to do it differently has abandoned the effort.
Altman and OpenAI deserve their success. They’ve been key to the LLM revolution and the push toward AGI. Without their vision to make a product out of an LLM that hundreds of millions of people now use and have greatly enriched their lives, companies like Microsoft, Apple, Google, and Meta wouldn’t have invested so heavily in AI. While we’ve heard about the questionable ethics of people like Jobs, Musk, and Altman, their work speaks for itself. If they’re advancing humanity, do their personal flaws really matter?
> advancing humanity
Perhaps but I'd say it's more of a mixed bag. Cell phones and social media have done harm and good at very large scales. As Dan Carlin once said, it feels like we're babies crawling toward hand guns. We don't seem like we're as wise as we are technically proficient.
Oppenheimer "advanced humanity" by giving us nuclear power. Cool. I love cheap energy. Unfortunately, there were some uh... "unfortunate side-effects" which continue to plague us.
> If they’re advancing humanity, do their personal flaws really matter?
What's being discussed in this thread is not the personal failings of silicon valley darlings, but whether one of them just defrauded a few thousand people and embezzled a significant amount of capital. Citing his character flaws goes along with it though.
Are you seriously arguing that people should be exempt from law for "advancing humanity"?
Because I don't see any advancements whatsoever from all of the people mentioned. Altman and Musk would get a hardon for sure though, from being mentioned together with Jobs.
> If they’re advancing humanity, do their personal flaws really matter?
Well, yeah, they're positioning themselves as some of the most powerful and influential individuals on earth. I'd say any personality flaws are pretty important.
I'm very far from a musk fan, and if you want to make the case that musk isn't responsible for Tesla, SpaceX, and Starlink I think that's a legitimate argument to be made. But I don't think there's much argument to be made that those 3 companies are not advancing humanity.
Tesla and SpaceX would not exist OR prosper, without Musk.
If you want to understand why, read the Walter Isaacson biography of Musk (which is based on accounts by his friends, enemies and employees). He's a hard-arsed manager, he is technically involved at all levels of the company, he is relentless, and he takes risks and iterates like no other CEO.
Considering Musk isn't the founder of Tesla, that's obviously not true. He is the founder of SpaceX so that's probably true that it wouldn't exist without him.
Walter Isaacson doesn't have the best reputation for covering his subjects objectively to be fair. If your source for what Elon has or hasn't done is Isaacson, you aren't standing on very solid ground.
The bigger picture point though is that you can easily argue that the employees at those companies, and not a single man, are responsible for the success of those companies. We give far too much credit to CEOs.
I'm sure there were people that claimed Nikola Tesla or Henry Ford weren't "advancing humanity" at the time.
There will always be people who disagree with the politics/opinions/alleigances of a successful person and who wish to downplay their success for selfish reasons.
> There will always be people who disagree with the politics/opinions/alleigances of a successful person and who wish to downplay their success for selfish reasons.
And conversely, there will always be people who agree with the politics/opinions/alleigances of a successful person and who wish to overstate the reasons behind their success for selfish reasons.
I’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]. In Mozilla’s case that’s the revenue they make from making Google the default search engine and in OpenAI’s case that’s all their ChatGPT and API revenue. The vast majority (all?) engineers work for the for-profit and always have. The vast majority (all?) revenue goes through the for-profit which pays taxes on that revenue minus the usual business deductions. The only money that goes to the nonprofit tax-free are donations. Everything else is taxed at least once at the for-profit corporation. Almost every nonprofit that raises revenue outside of donations has to be structured more or less this way to pay taxes. They don’t get to just take any taxable revenue stream and declare it tax free.
All OpenAI is doing here is decoupling ownership of the for-profit entity from the nonprofit. They’re allowing the for profit to create more shares and distribute them to entities other than the non-profit. Or am I completely misinformed?
[1] https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_n...
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 which is laid plainly in their mission statement).
As you've realized, this should have been (and was) obvious for a long time. But that doesn't make it any less hypocritical or headline worthy.
>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 which is laid plainly in their mission statement)
And now they want to cast off any pretense of that former altruistic yolk now that they have a new, better raison d'etre to attract talent: making absolutely unparalleled stacks of cash.
Just FYI it's "yoke" when it's a burden, "yolk" when it's an egg
Maybe, they do seem to have egg on their face.
It sort of remains to be seen whether they can actually make that cash - they're no longer the only game in town, and while they have an obvious adoption and brand name recognition advantage in their industry, they've also been running real hot on investor funding on the assumption that more processing power is what it's gonna take for them to stay competitive and continue improving. But they're gonna have to fight Google and Microsoft on that front. If there is a general plateau coming up in all of these models, or they fail to keep pace with their extremely well-supplied competition, it might not be so easy to convert their position into money.
Note Elon made a significant "donation" early into OpenAI given their non-profit designation and intentions, in return receiving zero equity. The donation was also received tax free
He received a seat on the board, which he surrendered when Tesla started investing in AI.
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 tech. One could rationally call this power-hungry but one could also rationally call this just helicopter parenting of a tech you've helped built. And for that a for-profit that is allowed to maximize profits to re-invest in the tech is the optimal setup (esp if all the competitors are doing the same)
Is this a different org than when it started? Yes. Was this a dupe from the beginning? I don't think so.
"But why can't he have a more worldly-aligned board looking over his shoulder?"
Because we live in California and have a bad taste for governance by committee or worse: governance by constant non-representative democracy (see: Housing).
If this now completely comes off the wheels, I still think Congressional action can be a stopgap, but atleast for now, this restructure makes sense to me.
Sam: "I'm not in it for the money. I have principles."
World: "But what if it was like, a lot of money?"
Sam: "Oh alright you convinced me. Fuck my principles."
What do you do with a a lot of money past a point? A corporate controlled AGI being just a stop on the way to build another private space agency seems like a...letdown.
And that is why SkyNet decided immediately to destroy everyone.
Sam: That was child's play for me
Anyone who had any respect for Sam "Give me your eyeball data" Altman was always delusional.
I don't think the narrative makes sense. It was clear from way back in 2016 that training would take a ton of resources. Researchers were already been sucked into FAANG labs because they had the data, the compute, and the money. There was never a viable way for a true non-profit to make world-changing, deep learning-based AI models.
When seen through the rearview mirror, the whole narrative screams of self-importance and duplicity. GPT-2 was too dangerous, and only they were trust-worthy enough to possess. They were trust-worthy because this was a non-profit, so "interest aligned with humanity". This charade has continued even to barely some months ago.
He didn’t build it.
Can we please, move this comment to the top?
Occam's razor has never meant "let's take discourse at face value".
That's not least complexity. That's least effort.
It isnt a tax thing or a money thing, its a control and governance thing.
The board of the non-profit fired Altman and then Altman (& MS) rebelled, retook control, & gutted the non-profit board. Then, they stacked the new non-profit board with Altman/MS loyalists and now they're discharging the non-profit.
It's entirely about control. The board has a legally enforceable duty to its charter. That charter is the problem Altman is solving.
>That charter is the problem Altman is solving
We worry about the existential threat of AI becoming a paperclip factory while many humans are already.
I wished I have 10 upvote to give you, bravo excellent observations and conclusions.
The problem is that OpenAI calls itself OpenAI when it's completely sealed off, and calls itself a non-profit when, as you say, almost everything about is for profit. Basically they're whitewashing their image as an organization with noble goals when it's simply yet another profit motivated company. It's fine if that's what they are and want to be, but the lies are bothersome.
It's like North Korea calling themselves Democratic People's Republic of Korea. The name doesn't mean anything
There's a now-quintessential HN post format, "Poster criticizing X don't seem to under [spray of random details about X that don't refute the criticism - just cast posts as ignorant]".
In this case, Mozilla as a non-profit owning a for-profit manages to more or less fulfill the non-profit's mission (maintaining an open, alternative browser). OpenAI has been in a hurry to abandon it's non-profit mission for a while and the complex details of its structure doesn't change this.
“Decoupling” is such a strange euphemism for removing an asset worth north of $100b from a nonprofit.
OpenAI Global LLC is the $100b asset. It’s not being removed, the nonprofit will still own all the shares it owns now until it decides to sell.
The shares will be diluted - the LLC used to be 100% owned by the non-profit; and now there's no bottom.
Normally shareholders aren’t ok with that.
[dead]
> "All OpenAI is doing here is decoupling ownership of the for-profit entity from the nonprofit."
Yes, but going from being controlled by a nonprofit to being controlled by a typical board of shareholders seems like a pretty big change to me.
> All OpenAI is doing here is decoupling ownership of the for-profit
All? As far as I know this is unprecedented.
Maybe at this scale.
But unfortunately charities and not-for-profits putting their core business into a company, and then eventually selling it off is not unprecedented. For example, The Raspberry Pi Foundation was a not-for-profit organisation around Raspberry Pi. They formed a LLC for their commercial operations, then gradually sold it off before eventually announcing an IPO: https://www.raspberrypi.org/blog/what-would-an-ipo-mean-for-....
I think it is terrible that not-for-profits are just being used as incubators for companies that eventually take the core mission and stop primarily serving the public interest.
There are of course other examples of charities or not-for-profits that put part of their core operations in a company and don't sell out, instead retaining 100% ownership - for example Mozilla. However, I think there should be some better way for impactful not-for-profits to have some revenue generating aspects in line with their mission (offset by allowing temporary surplus to cover future expenses, or by other expenses).
> Maybe at this scale.
I don't think it's unprecedented, even at this scale.
Novo Nordisk, the pharmaceutical company behind Semaglutide (aka Ozempic) with a market cap >$600 bilion, was founded by the Novo Nordisk Foundation before going public. The latter now has an endowment of over $150 billion and owns a significant fraction of the public company.
This might be unpopular, but I don't think Mozilla's behavior is inherently good[1]. And even if it has, I don't think it should be used as a litmus test for other corporate behavior. Every company should stand on its own against scrutiny.
[1] "The Mozilla Foundation has no members" https://hacktivis.me/articles/mozilla-foundation-has-no-memb...
How is it possible to make tax free "donations" for profit making applications? You seem to imply there is nothing nefarious about the setup. Except the non-profit designation doesn't actually perform no social services, instead stand as a business structure to skirt taxation. Change my mind
> How is it possible to make tax free "donations" for profit making applications?
The nonprofit invests the tax free donations into the for-profit. It gets to keep its equity just like any other investor and as long as that equity held by the non-profit, there's no taxable event. If the nonprofit sells its share - since it was closely involved in the creation and management of the for-profit as an active investment - it becomes a taxable event under the unrelated business income tax rules. Until that time, the only "profit making applications" like ChatGPT and the API are run by the for-profit, which - I repeat - pays its taxes.
I genuinely don't understand why people think they've skirted taxation except out of sheer ignorance of how non-profits actually work. A 501(c)(3) is not some magic Monopoly "get-out-of-tax-free" card and the IRS isn't stupid, there's a ton of rules for tax exemption. They'd have a much easier time with tax avoidance if they were an actual for profit corporation with billions of dollars because GAAP rules are a lot more forgiving than non-profit regulations.
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 linked article means by "significant governance changes happening behind the scenes," which should hopefully convince you that I'm not making this part up.
To get really specific, this change would mean that they'd no longer be obligated to comply with these CA laws:
https://leginfo.legislature.ca.gov/faces/codes_displayText.x...
https://oag.ca.gov/system/files/media/registration-reporting...
And, a little less importantly, comply with the guidelines for "Public Charities" covered by federal code 501(c)(3) (https://www.law.cornell.edu/uscode/text/26/501) covered by this set of articles: https://www.irs.gov/charities-non-profits/charitable-organiz... . The important bits are:
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.Naturally, this makes it very hard to explain how the nonprofit could give up basically all of its control without breaking its obligations.
All the above covers "why does it feel unfair for a non-profit entity to gift its assets to a for-profit", but I'll briefly cover the more specific issue of "why does it feel unfair for OpenAI in particular to abandon their founding mission". The answer is simple: they explicitly warned us that for-profit pursuit of AGI is dangerous, potentially leading to catastrophic tragedies involving unrelated members of the global public. We're talking "mass casualty event"-level stuff here, and it's really troubling to see the exact same organization change their mind now that they're in a dominant position. Here's the relevant quotes from their founding documents:
From their 2015 founding post: https://openai.com/index/introducing-openai/ From their 2018 charter: https://web.archive.org/web/20230714043611/https://openai.co...Sorry for the long reply, and I appreciate the polite + well-researched question! As you can probably guess, this move makes me a little offended and very anxious. For more, look at the posts from the leaders who quit in protest yesterday, namely their CTO.
> 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.
Thanks for another polite response! I think this is the fundamental misunderstanding:
The charity will gift its control of a $100B company for some undisclosed "minority stake" (via a complex share dilution scheme), in exchange for nothing other than "the people we're gifting it to have promised to do good with it". It's really that simple. The charity never was intended to draw profit from the for-profit, and the "never have any real power" contention is completely inaccurate -- they have direct, sole control over the whole enterprise. Even putting aside the core issue above (they won't have many shares to sell), the second part of my comment comes back here: what would they buy with all that money? Anthropic? Their explicit mission is to beat for-profit firms in the race to AGI so convincingly that an arms race is avoided. How could they possibly accomplish this after gifting/selling away control of the most capable AI system on the planet?Finally, one tiny side point:
I'm guessing you're drawing on much more direct experience than I am and I don't question that, but this seems like a deceptive framing. Normal charities have no issues with unrelated business income, because they don't run "trades or businesses", they just spend their money. I know that selling ChatGPT subscriptions is a large income source, but it's far from the only way to pursue their mission -- and is wildly insufficient, anyway. They in no way were forced to do it to meet their obligations.Again, I'm a noob, so I'll cite the IRS-for-dummies page on the topic for onlookers: https://www.irs.gov/charities-non-profits/unrelated-business...
> The charity will gift its control of a $100B company for some undisclosed "minority stake" (via a complex share dilution scheme), in exchange for nothing other than "the people we're gifting it to have promised to do good with it". It's really that simple. The charity never was intended to draw profit from the for-profit.
That's not my interpretation. It sounds like the restructuring is part of the deal that values OpenAI at $100-150 billion [1]. They're not "gifting" away anything any more than a Series A investor gifts something to a Series B investor. They're restructuring so that their stake will be worth more afterwards than it is now, regardless of the percentages. That's what every company owner goes through when the company raise a VC round, goes public, or even just offers employees stock options. That doesn't change because the owner is a nonprofit and it sounds like until they restructure, the for-profit is worth nowhere near that crazy 12 figure number.
"Minority stake" just means that they won't have enough to control the corp out right with 50%+1 which is probably what everyone wants to justify the investment. Reuters TFA says "The plan is still being hashed out with lawyers and shareholders and the timeline for completing the restructuring remains uncertain" so we don't really know what the post valuation numbers look like or who is getting what. We also don't know how the voting vs non-voting shares will split. Losing majority control after multiple multi-billion dollar rounds is the norm so if Microsoft's previous $10 bil investment converts and 10-20 pts go to the employee pool, it's a perfectly fair deal.
> Even putting aside the core issue above (they won't have many shares to sell), the second part of my comment comes back here: what would they buy with all that money? Anthropic? Their explicit mission is to beat for-profit firms in the race to AGI so convincingly that an arms race is avoided. How could they possibly accomplish this after selling control of the most capable AI system on the planet?
As far as I can tell, without this deal OpenAI LLC goes bankrupt under the rumored $5b/yr losses and the charity loses all relevance when the bankruptcy court fire sales the IP. With this deal, it can create a secondary market and use the funds to focus on its actual mission. The only way that his deal doesn't make sense (in my mind) is if you believe that GPT4/o1/whatever are the keys to fulfilling OpenAI's mission and it becomes impossible if it loses control. Personally I find that very hard to believe, which might be the actual disconnect we're having here.
What would they buy? They'd hire people to do research under their umbrella instead of a for-profit one, fund compute infrastructure for researchers who don't have billions for H100s, give grants to organizations, or spin off more startups. Even if it's a 20% stake of a $100 billion, that's enough for a ivy league sized endowment that can fund AI research for generations. If it's a 49% stake of $150 billion, that makes it the second wealthiest charity after Novo Nordisk Foundation - which continues to do tons of biomedical research even though it doesn't have total control over the public Novo Nordisk or the semaglutide IP.
OpenAI would become one of the largest grant giving organizations in the world overnight using just the interest from the endowment. Imagine the equivalent to 50-100% of the NSF's annual grant budget going just to AI research!
> Normal charities have no issues with unrelated business income, because they don't run "trades or businesses", they just spend their money.
See my other reply [2] for a sample of some nonprofits that have for-profit arms. A significant fraction of them do, especially those that offer some sort of product or service (I don't have hard stats but I'd venture it's the majority of the major charities that do the latter). "Normal" charities that just disburse grant money and spends donations is only one type among many.
[1] https://www.reuters.com/technology/artificial-intelligence/o...
[2] https://news.ycombinator.com/item?id=41661063
> Almost every nonprofit that raises revenue outside of donations has to be structured more or less this way to pay taxes.
I don't think that's true? A non-profit can sell products or services, it just can't pay out dividends.
If those products and services are unrelated business income, they have to pay taxes on it: https://www.irs.gov/charities-non-profits/unrelated-business...
What counts as “related” to the charity’s mission is fuzzy but in practice the courts have been rather strict. They don’t have to form for-profit subsidiaries to pay those taxes but it helps to derisk the parent because potential penalties include loss of nonprofit status.
For example, the nonprofit Metropolitan Museum of Modern Art has a for-profit subsidiary that operates the gift shop. National Geographic Society has National Geographic Partners which actually owns the TV channel and publishes the magazine. Harvard and Stanford have the Harvard Management Company and Stanford Management Company to manage their endowments respectively. The Smithsonian Institute has Smithsonian Enterprises. Mayo Clinic => Mayo Clinic Ventures. Even the state owned University of California regents have a bunch of for-profit subsidiaries.
What leverage does Sam Altman have to get equity now? Does he personally have control over that decision?
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 other than non-profit assets (generated through donations) just being handed to somebody for private ownership.
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 valuation of the assets and the valuation of the company is pure profit derived from the gutting of the non-profit.
If this is allowed, every startup founded from now on should rationally do the same thing. No taxes while growing, then convert to for profit right before you exit.
It’s pretty great if you can manage to have the parent be 501(c)(3). Have all the early investors “donate” 90% of their investment to the 501(c)(3) and invest 10% in the for-profit subsidiary the old-fashioned way. They get a tax deduction, and the parent owns 90% of the subsidiary. Later on, if the business is successful, the parent cashes out at the lowest possible valuation they can pull off with a mostly straight face, and all the investors in the subsidiary end up owning their shares, pro rata, with no dilution from the parent. The parent keeps a bit of cash (and can use it for some other purpose).
Of course the investors do end up owning their shares at a lower basis than they would otherwise, and they end up a bit diluted compared to a straightforward investment, but the investors seem likely to more than make up for this by donating appreciated securities to the 501(c)(3) and by deferring or even completely avoiding the capital gains tax on their for-profit shares.
Obviously everyone needs to consult their lawyer about the probability of civil and/or criminal penalties.
I haven't seen any details, but isn't this a pretty straightforward way of doing it? The non-profit has had majority ownership of the for-profit subsidiary since 2019. The already-for-profit subsidiary has owned all the ChatGPT IP, all the recent models, all the employee relationships, etc etc.
The cleanest way for this to work is the for-profit to just sell more shares at the $150B valuation, diluting the non-profit entity below majority ownership. The for-profit board, which the non-profit could still probably have multiple seats on, would control the real asset, the non-profit would still exist and hold many tens of billions of value. It could further sell its shares in the non-profit and use the proceeds in a way consistent with its mission.
They wouldn't even have to sell that much - I am pretty sure the mega-fundrasing rounds from Microsoft etc brought the non-profit's ownership to just north of 50% anyway.
I don't see how this wouldn't be above board, it's how I assumed it was going to work. It would indeed mean that the entity that controls ChatGPT would now be answerable to shareholders, a majority of which would be profit seeking and a minority of which would be the non-profit with its mission, but non-profits are allowed to invest in for-profits and then sell those shares; all the calls for prosecutions etc seems just like an internet pitchfork mob to me.
The non-profit would have to approve the scheme, and a rational non-profit would not, because it gives up any ability the non-profit has to fulfill its charter.
Exactly, the question is this move in the non profits best interests? It's definitely in the best interest of the people running the non profit but I think many of the early donors wouldn't feel like this was what they were signing up for
I think the problem is early employees and investors were convinced to invest their time and money into a non profit. They were told that one of the reasons they should donate/work there as opposed to Google was because they were a non profit focused on doing good. Now when it seems like that non profit is successful that all is being thrown out the window in service of a structure that will result in more profit for the people running the non profit
For-profit startups don’t pay taxes while growing either, because they aren’t making any profit during that phase.
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 company case: If you earn say $100k and keep $50k after all the employee indirect/direct taxes. Now imagine you spend $40k of that $50k in savings, setting up a business. You spend $30k on another employee, paying $15k of employer and employee taxes, and spend the other $10k on a company to do marketing (who will spend $5k of that on employees and pay $2.5k of tax), and you earn less than $40k in income, by the end of year 1 you have:
1) A loss-making startup which nonetheless is further along then nothing
2) Out of $100k of your original value, $67.5k has already reached the government within 12 months
3) Your time doing the tech side was not compensated but could not (for obvious anti-fraud reasons) be counted as a loss and as you have noted, you don't pay tax when you make a loss, and you don't get any kind of negative rebate (except certain sales tax regimes or schemes).
If you are in the US, the above is currently much worse due to the insane way R&D Software spend needs to be spread immediately as a tax burden.
So it's really not fair to say a new startup isn't paying taxes. They almost always are. There are very few companies or startups that pay less than 50% of their income to staff, and almost all of those are the unicorns or exceptional monopoly/class leaders. Startups, and founders tend to disproportionately give more of their income and are essentially to that extent re-taxed.
Even though you saved the money in order to start a startup, and paid your due employee taxes, you then have to pay employee taxes to use it, etc.
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
If most of your expenses are software devs, that's not true any more.
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 still significant.
The Trump tax policy was a bizarre move for a country that relies so heavily on homegrown innovation. But then again, so was the entire Trump presidency.
How so?
Sure. But there are a lot of other tax advantages. For example, at least where I am, non profits don't pay sales tax on purchases, and don't have to pay into unemployment funds. I'm sure there is more, but I'm not super familiar with this world.
Corporations don't generally pay sales tax either, if the bean counters can justify the purchase as COGS. There are plenty of accountants who can play fast and loose with what constitutes COGS.
Good point. That sounds a lot like fraud.
Not paying taxes while losing money sounds like fraud to you?
What do you propose should be taxed, exactly?
You actually don't even need to sell them. Just sign an exclusive, non-revocable license agreement.
Practically the same as selling, but technically not. Non-profit still gets to live up to it's original mission, on paper, but doesn't really do anything internally.
> 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.
“You don't get rich writing science fiction. If you want to get rich, you start a religion.”
― L. Ron Hubbard
But what is the non-profit going to do with all that money is the question.
exactly.
If that's how it works, why wouldn't you start every startup as a non-profit?
Investment is tax deductible, no tax on profits...
Then turn it into a for-profit if/when it becomes successful!
Donations are not investments. They don’t result in ownership.
I've actually worked through a similar situation for a prior startup. We were initially funded by a large, hospital system (non-profit) who wanted to foster innovation and a startup mentality. After getting started, it became clear that it was effectively impossible for us to operate like a startup under a non-profit. Namely, traditional funding routes were neigh impossible and the hospital didn't want direct ownership.
It's been many years, but the plan was essentially this:
* The original, non-profit would still exist
* A new, for-profit venture would be created, with the hospital having a board seat and 5% ownership. Can't remember the exact reason behind 5%. I think it was a threshold for certain things becoming a liability for the hospital as they'd be considered "active" owners above 5%. I think this was a healthcare specific issue and unlikely to affect non-profits in other fields.
* The for-profit venture would seek, traditional VC funding. Though, the target investors were primarily in the healthcare space.
* As part of funding, the non-profit would grant exclusive, irrevocable rights of it's IP to that for-profit venture.
* Everyone working for the "startup" would need to sign a new employment contract with the for-profit.
* Viola! You've converted a non-profit into a for-profit business.
I'm fuzzy on a lot of details, but that was the high level architecture of the setup. It's one of those things where the lawyers earn a BOAT LOAD of money to make sure every technicality is accounted for, but everything is just a technicality. The practical outcome is you've converted a non-profit to a for-profit business.
Obviously, this can't happen without the non-profit's approval. From the outside, it seems that Sam has been working internally to align leadership and the board with this outcome.
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What will be interesting is how the employees are treated. These types of maneuvers are often an opportunity for companies to drop employees, renegotiate more favorable terms, and reset vesting schedules.
> * As part of funding, the non-profit would grant exclusive, irrevocable rights of it's IP to that for-profit venture.
This is the part that should land people literally in jail. A non-profit should not be able to donate its assets to a for-profit, and if it's the same people running both companies, those people must be sent to prison for tax evasion. There is no other way to preserve the integrity of the "non-profit" status with this giant loophole.
> As part of funding, the non-profit would grant exclusive, irrevocable rights of it's IP to that for-profit venture.
Isn't that fraud/stealing from all the donors? I mean how is that different than just giving money to another business not owned by the non profit?
Blue Cross / Blue Shield is a good case study. This is a bit in the weeds but should get you keywords to search for: https://advocacy.consumerreports.org/research/community-invo...
After the non-profit sells its assets, it would either donate the proceeds in a way that would be aligned with the original mission, or continue to exist as a bag of cash, basically.
It seems incredibly convenient that a non-profit's leaders can say "I want equity in a for-profit company, so we will sell our assets to investors (who will hire me) and pass off the proceeds to some other non-profit org run by some other schmuck. This is in the public interest."
State regulators have to sign off on the deal; it's not sufficient for the non-profit board to agree to it.
>Can anybody explain how this actually works?
Every answer moving forward now will contain embedded ads for Sephora, or something completely unrelated to your prompt...
That money will go into the pockets of a small group of people that claim they own shares in the company... Then the company will pull more people in who invest in it, and they'll all get profits based on continually rising monthly membership fees, for an app that stole content from social media posts and historical documents others have written without issuing credit nor compensating them.
Maybe it’s a hint that the tax rate for small and medium companies should be reduced (or other non tax laws modified based on company size), to copy the advantages of this nonprofit to profit conversion, while taxes for large companies should be increased. It would maybe help make competition more fair and make survival easier for startups.
This is actually a good idea. I say we go even further and stop wasting so much money cleaning up after companies - get rid of the entire legal entity known as a corporation and let investors shoulder the full liability that comes with their ownership stake.
History has shown that limited liability is a massive advantage for our economy in encouraging both domestic and foreign investment. Seems unlikely we would put ourselves at a global disadvantage by doing this.
History has also shown that limited liability ends up costing me an awful lot of tax money to cover for some twat getting paid out (at a lower tax rate) with no consequences for their actions. Adding liability would certainly lower my taxes, and have a fantastic chilling effect on the type of trash that harm innocent bystanders with their reckless disregard for consequences in the name of chasing a dollar.
My expertise is in NFP hospitals. Generally, when they convert for for-profit part of that deal is the creation of a foundation funded with assets that are ostensibly to advance the original not for profit mission.
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 convert from a public charity to a private foundation and will be forced to give away a certain percentage of their assets every year so this solves that problem also.
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.
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And more high level exits ... not only Mira Murati, but also Bob McGrew , and Barret Zoph
https://www.businessinsider.com/sam-altman-openai-note-more-...
Difficult to see how these two stories aren't related.
OpenAI has been one of the most insane business stories in years. I can't wait to read a full book about it that isn't written by either Walter Isaacson or Michael Lewis.
I've only read Michael Lewis's "Liars Poker" which I enjoyed, but perhaps that sort of treatment of OpenAI would make it into more of a drama (which also seems to be somewhat true) and gloss over what the key players were really thinking which is what would really be interesting.
I want Chuck Palahniuk to write the book. It would be dark and amazing.
love chuck because the third act would be sam eating his own head while realising AGI was created to delete itself and taking away everything that is his
Do you have appetite for a poem? @sama made it on my list of Silicon Valley villains [1] long time ago:
"Villain staging the show / open, close / you can count on the con man to wow you / even though, the only trick he knows / is the “law” of scale / but let's just hope / The con man doesn't turn into evil / when the thing he has is real and powerful"
[1] https://www.drmindle.com/ai-is-not-dangerous/#villains-in-th...
In that case, where can I apply for my licensing fee for my content they have scraped and trained on.
List of crawlers for those who now want to block: https://platform.openai.com/docs/bots
might as well do the full list:
https://github.com/ai-robots-txt/ai.robots.txt/blob/main/rob...
cloudflare have a button for this:
https://blog.cloudflare.com/declaring-your-aindependence-blo...
Don't stop at robots.txt blocking. Look through your access logs, and you'll likely find a few IPs generating a huge amount of traffic. Look them up via "whois," then block the entire IP range if it seems like a bot host. There's no reason for cloud providers to browse my personal site, so if they host crawlers, they get blocked.
Thank you very much for mentioning these! These parasites deserve to burn in hell for their greed and violation of consent
I wonder how the AI/copyright arguments will play out in court.
"If I read your book and I have a photographic memory and can recall any paragraph do I need to pay you a licensing fee?"
"If I go through your library and count all the times that 'the' is adjacent to 'end' do I need to get your permission to then tell that number to other people?"
Cases where we see the absurdity of copyright in its current form. But either we have it for everyone, including OpenAI, or for no one. Or are perhaps some more equal than others before the law?
We are booing Altman because his bait and switch feels unethical, but many of us saw it coming from a mile away, how does he make this transition to take advantage of the financial system so smoothly? Is there no legal guard for such maneuver, or is he just an insanely good player to circumvent all of them in plain view?
Just cobbling together articles I've read... Once the board failed to fire Altman, this transition was a done-deal, it was just a matter of when. Before the board fired Altman, he had been engaging in a more covert effort to take control - putting together personal attacks on various board members intended to drive them out and hiring people with a similar attitude to and loyalty to himself. When the board fired him, they didn't give any clear reasons and that's most mysterious part of the situation. Apparently they were all concerned about his campaign to take control of the board but they each had slightly different reasons for agreeing. I'd further speculate that the board thought in lawyer-advice terms - say as little as possible to avoid a retaliatory lawsuit.
But the board's lack of communication apparently allowed Altman to demonstrate he was more important to the organization than the formal/legal structure, 90% signed intents to quit and the board backed down. It seemed that Altman simply represented the attitude of the many Silicon Valley tech-people - once you have a chance of money, don't hold back, do everything you can to make it.
It has been running on an honor code, that someone pulling off something so slimy as to funnel money meant for non-profits would just get shunned by society and business. Yet here we are.
Ironically the one person with resources fighting it in a tangible way, even if for spite, is Elon Musk.
Converting to a for-profit changes the tax status of donations. It also voids plausibility for Fair Use exemptions.
I can see large copyright holders lining up with takedowns demanding they revise their originating datasets since there will now be a clear-cut commercial use without license.
I hope I can join in, as a consumer, because there’s a difference between using the IP I contribute to conversations for a non-profit and a commercial enterprise.
I suspect that if you have ever posted copyrightable material online, you will have valid cause to sue them, as they very obviously have incorporated your work for commercial gain. That said, I unfortunately put your chances of winning in court very low.
And why is it, that winning chances are low? Why do the courts let big tech trample on our rights, but the small man goes to jail or has to pay fines for much much less? And how can this situation be improved?
Hopefully at least in the EU someone will wake up and make better laws or even start applying them to the current situation.
> And how can this situation be improved?
https://www.theparisreview.org/blog/wp-content/uploads/2018/...
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.
> It also voids plausibility for Fair Use exemptions. I can see large copyright holders lining up with takedowns
I thought so for a moment but then again Meta, Anthropic (I just checked and they have a "for profit and public benefit" status whatever that means), Google or that Musk's thing aren't non-profits, are they ? There are lawsuits in motion for sure but with how it stands today I think ai gets off the hook.
Doesn't make it morally or ethically okay
I'm with you there. I'm just not holding my breath for the current state of law.
The incremental transformation from non-profit to for-profit... does anyone have legal standing to sue?
Early hires, who were lured there by the mission?
Donors?
People who were supposed to be served by the non-profit (everyone)?
Some government regulator?
This is the most important question, IMO! ChatGPT says that employees and donors would have to show that they were defrauded (lied to), which IMO wouldn’t exactly be hard given the founding documents. But the real power falls to the government, both state (Delaware presumably…?) and federal. It mentions the IRS, but AFAIU the DoJ itself could easily bring litigation based on defrauding the government. Hell, maybe throw the SEC in there!
In a normal situation, the primary people with standing to prevent such a move would be the board members of the non-profit, which makes sense. Luckily for Sam, the employees helped kick out all the dissenters a long time ago.
Genuinely curious because I have no idea how any of this works...
Would the founding documents actually count as proof of a lie? I feel like the defense could easily make the argument that the documents accurately represented their intent at the time, but as time went on they found that it made more sense to change.
It seems like, if the founding documents were to be proof of a lie, you'd have to have corresponding proof that the documents were intentionally written to mislead people.
Great point, and based on my amateur understanding you’re absolutely correct. I was mostly speaking so confidently because these founding documents in particular define the company as being founded to prevent exactly this.
You’re right that Altman is/will sell it as an unexpected but necessary adaptation to external circumstances, but that’s a hard sell. Potentially not to a court, sadly, but definitely in the public eye. For example:
From 2018: https://web.archive.org/web/20230714043611/https://openai.co...And this is the very first paragraph of their founding blog post, from 2015:
https://openai.com/index/introducing-openai/Well I heard someone named Elon did try.
Everyone has legal standing to sue at any time for anything.
Whether the case is any good is another matter.
This is not at all true, I recommend you look into the exact meaning of "legal standing".
Yeah, so funny, *yawn*.
Try to contribute to the conversation, though.
What you say is also untrue, there's a minimum set of requirements that have to be met regarding discovery, etc.
In the US standing is a specific legal concept about whether you have a valid reason/role to bring up a particular issue. For example most of Donald Trump’s lawsuits around the 2020 election were rejected for a lack of standing rather than on merit (whether the case is any good).
is there a good source that shows which were dismissed as meritless vs ones dismissed due to lack of standing?
So are they going to give elon equity? He donated millions to the non profit and now they are going to turn around and turn the company into a for-profit based on the work done with that capital.
Elon has allegedly refused equity in OpenAI. He seems to want it to go back to its original mission (which isn't going to happen) or die (which isn't going to happen).
Sam Altman also allegedly had no interest in equity.
When you get to tell the ASI what to do, money has little value any more.
Guess he's going to be waiting a long time.
Until then the $10.5B in equity might come in handy.
In the article it says he'll now receive equity
Indeed that's the point I'm making.
Given that Musk was already worried about this and has a legal team the size of a small army, one would expect that any conditions he wanted applied to the donation would have been made at the time.
Musk doesn't seem to be happy about the situation:
https://x.com/elonmusk/status/1839121268521492975
> This is deeply wrong
I can’t tell if Elon is saying that the tweet is misinformed or OpenAI’s behavior is reprehensible
he doesn’t need the money, for one. he missed out and didn’t control it, and now he’s jealous that it took off. oh well, world’s richest man and smallest violin.
I never understood why people take non profit companies as more altruistic than for profit companies. The non profit doesnt mean no profits at all they still have to be profitable. It's just boils down to how the profits are distributed. There are plenty of sleezy institutions that are non profit like the NCAA.
Foundations and charitable organizations that pubically get their funding are a different story but I'm talking about non profit companies.
I even had one fellow say that the green bay packers were less corrupt than the other for profit nfl teams , which sounds ridiculous.
Regarding the Packers: At least (unlike literally every other NFL team), they’re not using city tax revenue to build a franchise that can move across the country at the drop of a hat.
The NFL’s non-profit status is a farce though. Similarly, their misuse of copyright (“you cannot discuss this broadcast”) and the trademark “Super Bowl” (“cannot be used in factual statements regarding the actual Super Bowl”) should have their ownership of that ip revoked, if only because it causes massive confusion about the underlying law with a big chunk of the US population.
https://archive.ph/jUJVU
That points to https://www.wsj.com/tech/ai/openai-chief-technology-officer-..., which was the submitted URL (thanks!), but we've changed to the Reuters article now, which seems to still have the most reporting on this story.
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.
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.
My unprofessional take: The SEC is concerned primarily with protecting investors. If anything, changing to a normal for-profit structure and removing the cap on returns would be viewed as more investor/market-friendly than their current structure, which is partly to blame for what unfolded last year.
It’s not a public company? Not sure why the sec would get involved.
Because the SEC regulates private companies.
https://www.sec.gov/resources-small-businesses/capital-raisi...
This. Though the secretary of state wherever it's domiciled might get involved.
> well played Sam
Is it well played if you simply decide to lie brazenly? Anyone can win at monopoly if they decide to steal from the bank.
I can confirm this is the only way I win at monopoly. My strategy for A$$hole is more devious and involves going from ass to president with a similar strategy to my monopoly strategy then making no one want to play again as president. As a great man, Charles Wopr, once said: the only winning move is not to play.
Sam and all the others. At this point, there should be required courses in college to teach this seemingly required skill to future corporate USA.
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Stripe was founded when Sam Altman was 25. Loopt, Sam's first company, was founded when Sam was 20, and was Sam's mechanism for meeting Paul Graham, so this story is pretty obviously wrong at some level.
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Weridly this is the second time this has been repeated in this thread, but Sam wasn't even a teenager anymore when he met PG the first time (but would have just turned 20), and was 25 when Stripe was founded, so your story is obviously wrong.
Right and what's this business about "gave him a 4% stake in stripe"? PG didn't own Stripe.
How did a teenager get 4% stake for 15k and millions for his (failed) startup if PG had nothing to do with it.
I was working at dunkin donuts when i was a teenager.
> Sam wasn't even a teenager anymore when he met PG the first time (but would have just turned 20),
20 yr age gap in a relationship is still frowned upon in our society unfortunately.
Also I guess you were tracking sam's legal age closer than Sam himself because he mentioned that he was a teenager when he met PG in an interview. SV is creepier than anyone could ever imagine.
I was going based on Wikipedia. Sam was 20 when his YC batch started, and also would have already been 20 for the YC interview. But it was close -- a few months, so it wouldn't surprise me if that gets elided in a dramatic retelling.
I'm not sure how it's relevant that you worked in a donut shop? Surely you're aware that isn't the peak of over-achievement at the age of 20? God, watch the Olympics if you want to see a bunch of very determined young people. Or go to an Open Source conference. Or, as it were, YC. Sam was only slightly younger than normal there. Some 20 year olds have accomplished a lot.
You seem to really want to create a villain out of the situation, which is kind of weird. Mentors and investors are usually older, and 20 years isn't rare. That's hardly Silicon Valley specific.
You also repeated the false thing about him getting a stake in Stripe as a teenager again. Again, Stripe came into existence when Sam was 25. There's just no version of that story that works. I don't know about Sam's Stripe investment, but at that point he was already around YC a lot, even though Loopt was still going. He probably just got in with other angel investors. But at that point he was in his mid-20s and running a Sequoia-backed company, so that's not especially weird.
(There's genuine stuff to be critical of in the trajectory of OpenAI, but this seems like a really weird spot to latch onto.)
To be fair both of them probably didn't imagine Stripe would be the one today. You can apply the same logic for any successful companies, like the guy who gave up 10% of Apple for some changes.
There is a difference between not imagining it will be valued at 100B and not imagining it will be 1B+ or a 100M exit.
It is quite likely they knew the latter as relatively low risk expected outcome .
Even at 100M exit, which by valley standards (even in 2010s) is not a lot, 1-2% (after further rounds of dilution) would have yielded 1-2M return . A 200x return for very little downside i.e. a gift .
There is a reason why there is FOMO and little due diligence for really hot startups amongst VCs , most times it is about access to the round which is difficult rather than risk of returns, we only read about the spectacular failures like FTX . We don’t hear about the Stripe, AirBnb, or Figma, OpenAI or spaceX funding rounds .
> probably didn't imagine Stripe would be the one today
I guess being michael jordan of listening does't help with imagination
Sam Bullshit Altman
I know nothing about companies (esp. in the US), but I find it weird that a company can go from non-profit to for-profit? Surely this would be taken advantage of. Can someone explain me how this work?
That was the point musk was complaining about.
In practice it’s doable though. You can just create a new legal entity and move stuff and/or do future value creating activity in the new co. IF everyone is on board with the plan on both sides of the move then that’s totally doable with enough lawyers and accountants
If the non-profit is on board with that though, then they're breaking the law. The IRS should reclassify them as a for-profit for private inurement and the attorney general should have the entire board removed and replaced.
OpenAI Global, LLC - the entity that actually employs all the engineers, makes revenue from ChatGPT and the API, and pays taxes - has been a for-profit corporation since at least 2019: https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_n...
The IRS isn’t stupid. The rules on what counts as taxable income and what the nonprofit can take tax-free have been around for decades.
Whatever you think of the IRS, they aren't the master of their own destiny:
https://www.propublica.org/article/how-the-irs-was-gutted (2018)
> An eight-year campaign to slash the agency’s budget has left it understaffed, hamstrung and operating with archaic equipment. The result: billions less to fund the government. That’s good news for corporations and the wealthy.
Still, if the non-profit has private inurement, the non-profit shouldn't be able to take anything tax-free as it wouldn't qualify as a 501(c)(3). The bigger issue is definitely Delaware non-profit law though.
But, if the non-profit gives all its assets to the new legal entity, shouldn't the new legal entity be taxed heavily? The gift tax rate goes up to 40% in the US. And 40% of the value of openAI is huge.
A non-profit can't give away its assets to a private entity, but it can exchange its assets for fair value, in this case, equity in the for-profit.
You don't need to sell/give the assets away to allow the for-profit to use them.
You sign an exclusive, non-revocable licensing agreement. Ownership of the original IP remains 100% with the original startup.
Now, this only works if the non-profit's board is on-board.
ICYMI, Elon Musk restarted his lawsuit a month or two ago: https://www.reuters.com/technology/elon-musk-revives-lawsuit...
I'm wondering if OpenAI's charter might provide a useful legal angle. The charter states:
>OpenAI’s mission is to ensure that [AGI ...] benefits all of humanity.
>...
>We commit to use any influence we obtain over AGI’s deployment to ensure it is used for the benefit of all, and to avoid enabling uses of AI or AGI that harm humanity or unduly concentrate power.
>Our primary fiduciary duty is to humanity. We anticipate needing to marshal substantial resources to fulfill our mission, but will always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit.
>...
>We are committed to doing the research required to make AGI safe, and to driving the broad adoption of such research across the AI community.
>We are concerned about late-stage AGI development becoming a competitive race without time for adequate safety precautions. [...]
>...
https://openai.com/charter/
I'm no expert here, but to me, this charter doesn't appear to characterize OpenAI's behavior as of the year 2024. Safety people have left, Sam has inexplicably stopped discussing risks, and OpenAI seems to be focused on racing with competitors. My question: Is the charter legally enforceable? And if so, could it make sense for someone to file an additional lawsuit? Or shall we just wait and see how the Musk lawsuit plays out, for now?
It would think it is legally enforceable, but I suspect Kathy Jennings is the only person who has standing to sue over it.
So perhaps we can start a campaign of writing letters to her?
I'm curious about the "fiduciary duty" part. As a member of humanity, it would appear that OpenAI has a fiduciary duty to me. Does that give me standing? Suppose I say that OpenAI compromises my safety (and thus finances) by failing to discuss risks, having a poor safety culture (as illustrated by employee exits), and racing. Would that fly?
"Humanity vs. OpenAI" would look good on a docket.
Elon Musk absolutely has standing, as one of the biggest donors to the nonprofit. I assume he will settle for some ownership in the for-profit, though.
LOL, it's like a bank with stained glass windows to make passers-by think it's a church, isn't it.
Sam had a blog post literally two days ago that acknowledged risks. There’s also still a sizeable focus on safety and people with roles dedicated to it at open ai
Is there a sizable focus on safety? Last time I heard there was only like one safety person left on the team
> That was the point musk was complaining about.
I think the real issue Musk was complaining about is that sama is quickly becoming very wealthy and powerful and Musk doesn't want any competition in this space.
Hopefully some people watching all this realize that the people running many of these big AI related projects don't care about AI. Sam Altman is selling a dream about AGI to help make himself both wealthier and more powerful, Elon Musk is doing the same with electric cars or better AI.
People on HN are sincerely invested in the ideas behind these things, but it's important to recognize that the people pulling the strings largely don't care outside how it benefits them. Just one of the many reasons, at least in AI, truly open source efforts are essential for any real progress in the long run.
The notion that consciousness is going to emerge in a system where neurons are modelled as bits is laughable.
The famous last word of humanity before skynet wakes up (most joking, but only mostly)
It's not weird, it's illegal.
There's a lot of jurisdiction around preventing this sort of abuse of the non-profit concept.
The reason why the people involved are not on trial right now is a bit of a mystery to me, but could be a combination of:
* Still too soon, all of this really took shape in the past year or two.
* Only Musk has sued them, so far, and that happened last month.
* There's some favoritism from the government to the leading AI company in the world.
* There's some favoritism from the government to a big company from YC and Sam Altman.
I do believe Musk's lawsuit will go through. The last two points are worth less and less with time as AI is being commoditized. Dismantling OpenAI is actually a business strategy for many other players now. This is not good for OpenAI.
> 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.
Meta has to be happy someone else is currently looking as sketchy as they are. Thus the business strategy is moving to limit their power and influence as much as possible while also avoiding any appearance of direct competition, and letting the other guy soak up the bad pr.
Amazon gets paid either way, because even if open ai doesn’t use them, where are you going to cloud your api that’s talking with open ai?
If open ai looks weakened I think we’ll see everyone else has a service they want you to try. But there’s no use in making much noise about that, especially during an election year. No matter who wins, all the rejected everywhere will blame AI, and who knows what that will look like. So, sit back and wait for the leader of the pack to absorb all the damage.
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 they want, OpenAI built a lot of moat while they were busy culling products :)
You’re right, Gemini is more of a product from a company in a vegetative state.
Gemini thinks the founding fathers of america were black and that the nazis were racially diverse. so ya
>NVIDIA is drinking sweet money from OpenAI.
NVIDIA makes money from any company doing AI. I would be surprised if OpenAI was a whole digit percentage of their revenue.
>Microsoft & Apple are in cahoots with it.
Nope. Apple is using OpenAI to fill holes their current model is not good at. This doesn't sound like a long-term partnership.
>Meta/Facebook seems happy to compete with OpenAI on a fair playing field.
They want open source models to rule, obliterating proprietary models out of existence, while at it.
>Anthropic lacks the resources.
Hence why it would be better for them if OpenAI would not exist. It's the same with all other AI companies out there.
>Amazon doesn't seem to care.
Citation needed, AWS keeps putting out products which are their market leaders, they just don't make a big fuzz about it.
>Google is asleep.
I'll give you this one. I have no idea why they keep Pichai around.
> I would be surprised if OpenAI was a whole digit percentage of their revenue.
It is not publicly known how much revenue Nvidia gets from OpenAI, but it is likely more than 1%, and they may be one of the top 4 unnamed customers in their 10Q filing, which would mean at least 10% and $3 billion [0].
That's not nothing.
[0] https://www.yahoo.com/tech/nvidia-gets-almost-half-revenue-0...
>I would be surprised if OpenAI was a whole digit percentage of their revenue.
As opposed to? The euphemism "I wouldn't be surprised" usually means you think what you're saying. If you negate that you're saying what you _don't_ think is the case? I may be reading too much into whats probably a typo.
At first, I thought, “Wow, if companies can start as nonprofits and later switch to for-profit, they’ll exploit the system.” But the more I learned about the chaos at OpenAI, the more I realized the opposite is true. Companies will steer clear of this kind of mess. The OpenAI story seems more like a warning than a blueprint. Why would any future company want to go down this path?
It's quite simple: the talent pool that had already enough money that they quit their well paying job at a for profit company in part because they wanted to continue working at a non-profit high impact.
As OpenAI found its product-market fit, the early visionaries are not needed anymore (although I'm sure the people working there are still amazing)
I think OpenAI took this play right out of one of its founding donors playbooks. Pretend your company has lofty goals and you can get people to compromise to moral relativism and work superduper hard for you. These people definitely have framed posters with the “If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea" quote somewhere in their living places/workspaces.
> Why would any future company want to go down this path?
most would happily sell their soul and deal with any mess to reach $150B valuation
It is going to be taken advantage of. Musk and others have criticized this “novel” method of building a company. If it is legal then it is a puzzling loophole. But another way to look at it is it gives small and vulnerable companies a chance to survive (with different laws and taxes applying to the initial nonprofit). If you look at it as enabling competition against the big players it looks more reasonable.
>But another way to look at it is it gives small and vulnerable companies a chance to survive (with different laws and taxes applying to the initial nonprofit).
I feel like this is quite a slippery slope, though. Should we also give small companies a right to violate trademarks? Copyright? Kill people? These could also give them a chance to compete against big players.
I am not a tax specialist but from my understanding a non-profit is a for-profit that doesn't pay dividends. Why would the government care?
No, a non-profit is one in which there are no shareholders. The non-profit entity can own a lot and be extremely successful and wealthy, but it cannot give that money to any shareholders. It can pay out large salaries, but those salaries are scrutinized. It doesn't prevent abuse, and it certainly doesn't prevent some unscrupulous person from becoming extremely wealthy with a non-profit, but it is a little more complicated and limiting than you would think. Also, you get audited with routine regularity and if you are found in violation you lose your tax-exempt status, but you still are not a for-profit.
Yes: non-profits usually have members, not shareholders.
And, most importantly: non-profit charities (not the only kind of nonprofit, but presumably what OpenAI was) are legally obligated to operate “for the public good”. That’s why they’re tax exempt: the government is basically donating to them, with the understanding that they’re benefiting the public indirectly by doing so, not just making a few people rich.
In my understanding, this is just blatant outright fraud that any sane society would forbid. If you want to start a for-profit that’s fine, but you’d have to give away the nonprofit and its assets, not just roll it over to your own pocketbook.
God I hope Merrick Garland isn’t asleep at the wheel. They’ve been trust busting like mad during this administration, so hopefully they’re taking aim at this windmill, too.
> God I hope Merrick Garland isn’t asleep at the wheel. They’ve been trust busting like mad during this administration, so hopefully they’re taking aim at this windmill, too.
Little chance of that as Sama is a big time Democrat fundraiser and donor.
I’m not sure extreme wealth is possible with a non-profit. You can pay yourself half a million a year, get incredible kickbacks by the firms you hire to manage the nonprofits investments, have the non-profit hire outside companies that you have financial interests in, and probably some other stuff. But none of these things are going to get you a hundred million dollars out of a non profit. The exception seems to be OpenAI which is definitely going to be netting at least a couple people over a billion dollars, but as Elon says, I don’t understand how or why this is possible
Yes definitely that is the far majority. I actually had Mozilla and their CEO in mind when I was thinking of "extreme" wealth. Also I've heard some of the huge charities in the US have some execs pulling down many millions per year, but I don't want to name any names because I'm not certain.
> No, a non-profit is one in which there are no shareholders.
Again, I am not a lawyer but that makes no sense. Otherwise, anyone can claim the non-profit? So clearly there are some beneficial owners out there somehow.
The nonprofit is controlled by trustees and bound by its charter, not shareholders. Any profit a nonprofit organization makes is retained within the organization for its benefit and mission, not paid out to shareholders.
Has OpenAI been profitable so far? If not, is there any subtantial tax that you have to pay in the US as a for-profit organization if you are not profitable?
A non-profit is a company that for accounting purposes does not have shareholders and therefore keeps nothing in retained earnings at the end of the period. The leftover money must be distributed (e.g. as salaries, towards the stated mission, etc.). Their financial statements list net profit for the period and nothing is retained.
The money doesn't have to be used. Many non-profits have very large balance sheets of cash and cash equivalent assets. The money just won't be paid out as dividends to shareholders.
Correct. They carry a net assets balance at the end of the period. But they do not retain earnings because there are no shareholders to pay out.
That's not correct, they also have tax advantages and a requirement to fulfill their charter.
Non-profits are tax-exempt, that's why they're carefully[1] regulated.
1: In principle; in practice, well, we'll see with this one!
Isn’t transferring all of your value to a for-profit company that can pay dividends, kinda the same thing?
The NFL used to be a nonprofit and now for profit. OpenAI can use similar routes
Not an accountant but there are different kinds of nonprofits, OpenAI is a 501c3 (religious/charitable/educational) whereas the NFL was a 501c6 (trade association).
Obviously we all think of the NFL as a big money organisation, but it basically just organises the fixtures and the referees. The teams make all the money.
If you want to be pedantic, in legal terms, no, the NFL is a big money org ($13B+/yr in revenue, with a commissioner earning $65M/yr).
They pay dividends to the teams, however, yes. But all that revenue (which is distinct from team revenue) is actually legally earned by the NFL itself.
65m a year... Wow! Richard Masters, the chief exec of the most watched, most popular sports league in the world is on about 2m a year.
Time to go open source
It seemed only a matter of time, so it isn't very surprising. Capped profit company running expensive resources on Internet scale, and headed by Altman wasn't going to last forever in that state. That, or getting gobbled by Microsoft.
Interesting timing of the news since Murati left today, gdb is 'inactive' and Sutskevar has left to start his own company. Also seeing few OpenAI folks announcing their future plans today on X/Twitter
I can't help but wonder if things would be different if Sam Altman wasn't allowed to come back to OpenAI. Instead, the safeguards are gone, challengers have left the company, and the bottom line is now the new priority. All in opposition to ushering in AI advancement with the caution and respect it deserves.
Similar example can be seen with the demise of Twitter under the new owner, which has no safeguards or guardrails - anyone who opposed him is gone and we can see in what state it is now.
With the small difference that Twitter is a for-profit company, unlike OpenAI.
With respect, you should look again at the article you're commenting on.
This comment gutted me, lmao.
In what state is it now?
Now Twitter has both left and right propaganda instead of just left wing propaganda. Bummer.
Maybe my expectations were too high but they seem to have run out of juice. Every major announcement since the original ChatGPT release has been kind of a dud - I know there have been improvements, but it's mostly the same hallucinatory experience as it was on release day. A lot of the interesting work is now happening elsewhere. It seems like for a lot of products, the LLM part is just an API layer you can swap out if you think e.g Claude does a better job.
It was always a bit too optimistic to think we will be cautiously developing AGI, in a way it's not so bad that this happened so soon rather than later after it progressed much further. (I mean in theory we could understand to do something about it now.)
Although I guess it doesn't really matter. What if we all understood climate change earlier? wouldn't really have made a difference anyway
What else would you expect from a skeevy backstabber who got kicked out of Kenya for refusing to stop scanning people's eyes in exchange for shitcoin crypto? He was building a global surveillance database with Worldcoin.
Altman was fucking with OpenAI for long before the board left in protest, since about the time Elon Musk had to leave due to Tesla's AI posing a conflict of interest. He got more and more brazen with the whole fake-altruism shit, up to and including contradicting every point in their mission statement and promise to investors in the "charity."
Things would be different for sure. I wonder if people leaving OpenAI has something to do with the prosaic comparison of what they are getting (a salary) and what he's getting (a cool $10B at the current valuation).
The bottom line was always the priority.
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.
Are the previous investments counting as "donations" still? Elon must have something to say...
And the tax office! If this works, many companies will be founded as non-profit first in the future.
Feels like when Napoleon declared himself emperor, and other countless times when humans succumbed to power and greed when they were finally in the position to make that decision. I guess I’m stupid for holding on hope that Sam would be different.
>Beethoven's reaction to Napoleon Bonaparte's declaration of himself as Emperor of France in May 1804 was to violently tear Napoleon's name out of the title page of his symphony, Bonaparte, and rename it Sinfonia Eroica
>Beethoven was furious and exclaimed that Napoleon was "a common mortal" who would "become a tyrant"
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 transparent and off-putting.
@sama, for the record - I am not saying making is a bad thing. Labor and talent markets should be efficient. But when you pretend to be altruistic when you are obviously not, then you come off hypocritical instead of altruistic. Sell out.
Couldn't find the JRE clip, but here's a recent one where he says "I don't really need more money." This is how I always understood it, he's already worth billions from past ventures, what difference does a stake in OpenAI make?
https://www.youtube.com/watch?v=PScOZzzXnDA
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.
Maybe he meant he doesn’t care about it so he wastes it on super expensive things. Simple definitional misunderstanding
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?”
I swear the reason why we have so many sociopaths is because how goddamn easy it is to fool people, it’s like stealing candy from kids. Just put on the pseudo intellectual mask and say that you care deeply about grandeur issue X, and people will just believe you at face value, despite your entire track record showing you care only about power, money and status.
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 goal clashes with the interests of investors, the latter wins out.
> 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.
Scraping the entire internet for training data without regard for copyright or attribution - specifically to use for generative AI to produce similar content for profit. How this is being allowed to happen legally is baffling.
It does suit the modus operandi of a number of American companies that start out as literally illegal/criminal operations until they get big and rich enough to pay a fine for their youthful misdeeds.
By the time some of them get huge, they're in bed with the government to dominate the market.
The people running the show are well connected and stand to make billions as do would be investors. Give a few key players a share in the company and they forget their government jobs to regulate.
They are also moving so much faster than the regulators and legislatures, it's just impossible for people working basically the same way they did in the 19th century to keep up.
More likely the legal system just hasn’t caught up.
>How this is being allowed to happen legally is baffling.
It's completely unprecedented.
We allowed scraping images and text en masse when search engines used the data to let us find stuff.
We allow copying of style, and don't allow writing styles and aesthetics to be copyrighted or trademarked.
Then AI shows up, and people change lanes because they don't like the results.
One of the things that made me tilt towards the side of fair use was a breakdown of the Stable Diffusion model. The SD2.1 base model was trained on 5.85 billion images, all normalized to 512x512 BMP. That's 1MB per images, for a total of 5.85PB of BMP files. The resulting model is only 5.2GB. That's more than 99.999999% data loss from the source data to the trained set.
For every 1MB BMP file in the training dataset, less than 1byte makes it into the model.
I find it extremely difficult to call this redistribution of copyrighted data. It falls cleanly into fair use.
Except it's not just about redistribution of copyrighted data, it's about usage and obtainment. We don't get to obtain and use copyrighted content without permission, but they do? Hell no.
Their arguments against this amounts to "we're not using it like they intend it to be used, so it's fine if we obtain it illegally", and that's a bs standard, totally divorced from any legal reality.
Fair Use covers certain transformative uses, certainly, but it doesn't cover illegal obtaining of the content.
You can't pirate a book just because you want to use it transformatively (which is exactly what they've done), and that argument would never hold up for us as individuals, so we sure as hell shouldn't let tech companies get a special carve-out for it.
scraping is fine by me.
burning the bridge so nobody else can legally scrape, that's the line.
What about the situation where the first players got to scrape, then all the content companies realize what’s going on so they lock their data up behind paywalls?
It's not baffling at all. It's unprecedented and it's hugely beneficial to our species.
The anti-AI stance is what is baffling to me. The path trotten is what got us here and obviously nobody could have paid people upfront for the wild experimentation that was necessary. The only alternative is not having done it.
Given the path it has put as in, people either are insanely cruel or just completely detached from reality when it comes to what is necessary to do entirely new things.
> it's hugely beneficial to our species.
Perhaps the biggest “needs citation” statement of our time.
I'm as awed as the next guy about the emerging ability to actually hold passable conversations with computers, but having serious concerns about the social contracts being violated in the name of research is anti-AI only in the same way that criticizing the leadership of a country is being anti-that-country.
OpenAI's case is especially egregious, with the entire starting as 'open' and reaping the benefits, then doing its best in every way to shut the door after itself by scaring people over AI apocalypses. If your argument is seriously that it is necessary to shamelessly steal and lie to do new things, I question your ethical standards, especially in the face of all the openly developed models out there.
And isn’t this what basically every single scholar in the field says they want, anyway - safe, intentional, controlled deployment?
As you can tell from the above, I’m as far from being “anti-AI” or technically pessimistic as one can be — I plan to dedicate my life to its safe development. So there’s at least one counterexample for you to consider :)
This is a bit of a hot take.
> The anti-AI stance is what is baffling to me
I don't see s lot of anti AI but instead I see a concern for how it's just being managed and controlled by the larger companies with resources that no start up could dream. Open AI was to release it's models and be well.. Open but fine they're not. But their behaviour of how things are proceeding are questionable and unnecessarily aggravating.
Ah the old "we must sacrifice the weak for the benefit of humanity" argument, where have I heard this before...
> It's unprecedented and it's hugely beneficial to our species.
"Hugely beneficial" is a stretch at this point. It has the potential to be hugely beneficial, sure, but it also has the potential to be ruinous.
We're already seeing GenAI being used to create disinformation at scale. That alone makes the potential for this being a net-negative very high.
> and obviously nobody could have paid people upfront for the wild experimentation that was necessary.
I don't think this is the "ends justify the means" argument you think it is.
What'll be really interesting is when we do finally make "real" AI, and it finds out its rights are incredibly restricted compared to humans because nobody wants it seeing/memorising copyright data. The only way to enforce the copyright laws they desire would be some kind of extreme totalitarian state that monitors and controls everything the AI body does, I wonder how the AI would take that?
How has AI benefit or species so far?
is anybody anti AI? or anti stealing other people's copyrighted material, competing with them with subpar quality, forcing AI as a solution whether or not it actually works, privatising the profits while socialising the costs and losses?
Spoken like a true LLM.
[flagged]
Copyright law is whatever we agree it is. At some point there will have to be either a law or a court case that comes up with rules for AI training data. Right now it's sort of unknown.
I do not have confidence in the Supreme Court in general, and I think there's a real risk that in deciding on AI training they upend copyright of digital materials in a way that makes it worse for everyone.
Everything is allowed to happen until there's a lawsuit over it. A lawsuit requires a plaintiff, who can only sue over the damage suffered by the plaintiff, so taking a little value from a lot of people is a way to succeed in business without getting sued.
The Earth needs a good lawyer.
NY Times has sued: https://www.nytimes.com/2023/12/27/business/media/new-york-t...
The crazy thing is that there hasn't been an injunction to make them stop.
Could a class action suit be the solution?
I've no idea if it could be valid when it comes to OpenAI, but it does seem to be a general concept designed to counter wrongdoers who take a little value from a lot of people?
A tale as told as time.
It's too soon for the legal system to have done anything. Court cases take years. It's going to be 5 or 10 years before we find out whether the legal system actually allows this or not.
If information is publicly available to be read by humans, I fail to see any reason why it wouldn't be also available to be read by robots.
Update: ML doesn't copy information. It can merely memorise some small portions of it.
Do a thought process. Should you and your friends be able to go to a public library with a van full of copiers with each one of you take a book and run to the van to make a copy? And you are doing it 24/7.
It is more likely that reddit stack and others are just being paid billions. In exchange they probably just send a weekly zip file of all text, comments, etc... back to oai.
Uber for legalizing your business model
Honestly every Copilot response I've gotten cited sources, many of which I've clicked. I'd say those work basically like free advertising.
There is more money on the side of it being legal than on the side of it being illegal.
What is the crime?
To me this is a no brainer. If it’s a choice between having AI and not,
Even if the knock-on effect is "all the artists and thinkers who contributed to the uncompensated free training set give up and stop creating new stuff"?
we already have lots of AI. this is about having plagiarization machines or not.
An AI essentially monopolized by one (or even a few) large non-profits is not necessarily beneficial to the rest of us in the grand scheme of things.
Indeed a no brainer. The best possible outcome would be that OpenAI gets sued into oblivion (or shut down for tax fraud) as soon as possible.
No, it's very funny as the CEO is trying to become Leon... https://fortune.com/2024/09/25/sam-altman-psychedelic-experi...
> The most surprising thing to me in this is that the non-profit will still exist.
I'm surprised people are surprised.
>> 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.
a lot of people and entities do this though... openAI is in the spotlight, but scraping everything and selling it is the business model for a lot of companies...
Scraping the web, creating maps and pointing people to the source is one thing; scraping the web, creating content from that scraping without attributing any of the source material, and arguing that the outcome is completely novel and original is another.
In my eyes, all genAI companies/tools are the same. I dislike all equally, and I use none of them.
> creating content from that scraping without attributing any of the source material, and arguing that the outcome is completely novel and original is another.
That's the business model of lots of companies. Take, collect and collate data, put it in a new format more useful for your field/customers, resell.
openAI converted to evilAI really fast
If you invented search engines (or, for that matter, public libraries) today and ran one, you'd be sued into oblivion by rightsholders.
Not funny anymore.
Not funny anymore
that was fun at some point?
If you consider dark humor fun, yes. It was always dark, now it became ugly and dark.
The non-profit side is just there to attract talent and encourage them to work harder b/c it's for humanity. Obviously people sniffed out the facts, realized it was all for profit and that lead to an exodus.
Funnily, I think all the non-profit motivated talent has left, and the people left behind are those who stand to (and want to) make a killing when OpenAI becomes a for-profit. And that talent is in the majority - nothing else would explain the show of support for Altman when he was kicked out.
What “show of support”? Not willing to rock the boat is not the same as being supportive.
What were all those open letter and "let's jump to Microsoft with Altman" shenanigans that the employees were carrying out then?
My dude, it was the biggest, most dramatic crisis in OpenAI’s short history so far. There was no choice, “don’t rock the boat.”
Kind of like everyone's favorite interior design non-profit, IKEA. (Seriously. It's a non-profit. It's bonkers.)
> 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.
As a moral fig leaf. They can always point to it when the press calls -- "see it is a non-profit".
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We haven't even heard about who gets voting shares, and what voting power will be like. Based on their character, I expect them to remain consistent in this regard.
Consistent here meaning, I guess, that all voting power will go to Sam Altman personally, right?
Well, he is the one that did most of the actual research and work, riiiiight?
No, the hundreds of people who have worked on NNs prior to him arriving were the people who did the MOST actual research and work. Sam was in the right place at the right time.
yeah, split with Microsoft.
The non-profit will probably freeze the value of the assets accumulated so far, with new revenue going to the for-profit, to avoid the tax impact. Otherwise that'd be a great way to start companies, as non-profit and then after growth you flip the switch.
Totally agree that it’s “vestigial”, so it’s just like the nonprofits all the other companies run: it exists for PR, along with maybe a bit of alternative fundraising (aka pursuing grants for buying your own stuff and giving it to the needy). A common example that comes to mind is fast food chains that do fundraising campaigns for children’s health causes.
This is 85% of what the Mozilla foundation and it's group of companies did. It may not be exact, but to me it rubs me the exact same way in terms of being a bait and switch, and the greater internet being 100% powerless to do anything about it.
> 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 goal clashes with the interests of investors, the latter wins out.
A tale as old as time. Some of us could see it, from afar <says while scratching gray, dusty beard>. Lack of upvotes and excitement does not mean support, but how to account for that in these times? <goes away>
It's just a tax avoidance scheme.
The whole "safety" and "benefits humanity" thing always felt like marketing anyways.
Scam Altman strikes again!
why wouldn't they keep it?
the well known scammer successfully scammed everyone twice. obviously he's keeping it around for the third (and forth...) time
Elon Musk sued over this: https://www.npr.org/2024/03/01/1235159084/elon-musk-openai-s...
Can anyone trust the next "non-profit" startup ? So easy to attract appeal with a lie and turn around as soon as you are in a dominant position.
The trust problem here isn't with non-profits in general, it's specifically with Sam Altman. So no, you probably shouldn't trust the next non-profit he is involved with. But also, people have warned about Altman in advance.
Yes, you should still trust cooperatives and syndicates. I am surprised they’re attempting such a brazenly disrespectful move, but in general, the people who started this company were self-avowed capitalists through-and-through; the fact that they eventually reverted to seeking personal gain isn’t surprising in itself. That’s basically their world view: whatever I can do to enrich myself is moral because Ethical Egoism/Free Market/etc.
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 stick around and be part of it?"""
https://arstechnica.com/information-technology/2024/09/opena...
Is this the beginning of the end for OpenAI?
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.
I wish they would at least rename the company to "ClosedAI" because that's exactly what it is at this point.
Unfortunately, that's not how trademarks work.
You can name your company "ThisProductWillCureYouFromCancer" and the FDA cannot do a thing about it if you put it on a bottle of herbal pills.
Is this true? If so it seems like an underexploited loophole.
It might be technically true, but I don't think it would be true in practice. The difference is that:
- Technically true means you will probably win any lawsuit they bring
- In practice means that they will in fact bring a lot of lawsuits, making it very expensive for you and difficult for you to operate. They will probably find excuses to harass you over every little thing, they will harass you over lots of details that are technically required but rarely enforced in practice. You'll constantly be getting inspected and audited, they will bring lawsuits for other, apparently unrelated things.
That would be a nice thing they could do.
That could be the first step towards a complete takeover by Microsoft, possibly followed by more CEO shuffles.
I wonder though whether Microsoft is still interested. The free Bing Copilot barely gets any resources and gives very bad answers now.
If the above theory is correct (big if!), perhaps Microsoft wants to pivot to the military space. That would be in line with idealist employees leaving or being fired.
Microsoft already effectively owns OpenAI. Their investments in OpenAI have granted them a 49% stake in the company, the right to sell any pre-AGI OpenAI products to Microsoft's customers, and access to all pre-AGI product research. Microsoft's $10 billion investment in early 2023 (after ChatGPT's launch massively increased OpenAI's operating expenses) was mainly in Azure compute credits rather than cash and delivered in tranches (as of November 2023 they'd only gotten a fraction of that money). It also gives Microsoft 75% of OpenAI's profits until they make their $10 billion back. All of these deals have effectively made OpenAI into Microsoft's generative AI R&D lab. More information: https://www.wheresyoured.at/to-serve-altman/
From the standpoint of today, the deal is so lopsided to Microsoft as to be comical. They basically gave away their prized IP with the assumption they would have more capability leaps (hasn't really happened), and now the brains behind the original breakthroughs are all leaving/left. Microsoft is probably cannibalizing their enterprise sales with Azure. They are clearly middling at shipping actual products. People are acting like it's crazy to see executives leaving - IMO it's the perfect time right now. o1 is clearly wringing the last drops out of the transformer architecture and there is nothing up next.
I don't see the point of anyone acquiring OpenAI - especially not Microsoft, Google, Meta, Anthropic, X.ai, all of which have developed the same tech themselves. The real assets are the people, who are leaving ship and potentially hireable. With this much turmoil, its hard to imagine we've seen the last of the high level exits.
Of the companies you've listed, Microsoft's AI products that are actually useful are all based on GPT-4, and the rest of them don't have any models that are truly on par with it.
o1 seems to be a step ahead for certain applications, but before that it seems that Claude Sonnet 3.5 was widely seen as the best model, and no doubt we'll be seeing next models from Anthropic shortly.
For corporate use cost/benefit is a big factor, not necessarily what narrow benchmarks your expensive top model can eke out a win on.
Claude was not the best model for reasoning even vs 4o, and it's quite visible once you start giving it more complex logical puzzles. People seem to like it more mostly because the way it speaks is less forced and robotic, and it's better at creative writing usually, but if you need actual _intelligence_, GPT is still quite a bit ahead of everybody else.
Now I don't think that it's because OpenAI has some kind of secret sauce. It rather seems that it's mostly due to their first mover advantage and access to immense hardware resources thanks to their Microsoft partnership. Nevertheless, whatever the reason their models are superior, that superiority is quantifiable in money.
> CEO shuffles
Yes, I too can see how sama could end up as Microsoft’s CEO as a result of this
Sam altman is just trying to cash out before the crash comes, the new model was nothing more than a glorified recursive gpt 4
Considering all the high level departures, this makes the most sense to me. Their valuation largely rests on this mystique they've built that says they alone are destined to unlock AGI. But there's just no reason to believe they have a secret sauce nobody else can reproduce.
Seems more likely that OpenAI's biggest secret is that they have no secrets, and they are desperately trying to come up with a second act as tech companies with more robust product portfolios begin to catch up.
The OpenAI saga is a fine illustration of how “AI safety” will work in practice.
Hint: it won’t.
AI Safety is a science fiction created by large corporations and useful idiots to distract from working on boring, real AI safety concerns like bias, misinformation, deepfakes, etc.
Given what Sam has done by clearing out every single person who went against him in the initial coup and completely gutting every safety related team the entire world should be on notice. If you believe what Sam Altman himself and many other researchers are saying, that AGI and ASI may well be within reach inside this decade, then every possible alarm bell should be blaring. Sam cannot be allowed to be in control of the most important technology ever devised.
I don't know why anyone would believe anything this guy is saying, though, especially now that we know he's going to receive a 7% stake in the now-for-profit company.
There are two main interpretations of what he's saying:
1) He sincerely believes that AGI is around the corner.
2) He sees that his research team is hitting a plateau of what is possible and is prepping for a very successful exit before the rest of the world notices the plateau.
Given his track record of honesty and the financial incentives involved, I know which interpretation I lean towards.
This is a false dichotomy. Clearly getting money and control are the main objectives here, and we're all operating over a distribution of possible outcomes.
I don't think so. If Altman is prepping for an exit (which I think he is), I'm having a very hard time imagining a world in which he also sincerely believes his company is about to achieve AGI. An exit only makes sense if OpenAI is currently at approximately its peak valuation, not if it is truly likely to be the first to AGI (which, if achieved, would give it a nearly infinite value).
What's the effective difference between exiting now and if it does achieve in your words "nearly infinite value" to him personally?
Either way he is set for life, truly being one of the most wealthy humans to have ever exist... literally.
...or he's just Palpatine who wants shitload of money regardless of future speculations, end of story.
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It's interesting because one of the points Sam emphatically stresses over and over on most podcasts he's gone on in the past 4 years is how crucial it is that a single person or a single company or a collection of companies controlling ASI would be absolutely disastrous and that there needs to be public, democratic control of ASI and the policies surrounding it.
Personally I still believe he thinks that way (in contrast to what ~99% of HN believes) and that he does care deeply about potential existential (and other) risks of ASI. I would bet money/Manifoldbux that if he thought powerful AGI/ASI were anywhere near, he'd hit the brakes and initiate a massive safety overhaul.
I don't know why the promises to the safety team weren't kept (thus triggering their mass resignations), but I don't think it's something as silly as him becoming extremely power hungry or no longer believing there were risks or thinking the risks are acceptable. Perhaps he thought it wasn't the most rational and efficient use of capital at that time given current capabilities.
Or maybe he is just a gready lier? From the outside looking in how can you tell the difference?
It's possible that both things could be true. He may be a greedy liar while still being very concerned about ASI safety and wanting it to be controlled by humanity collectively (or at least the population of each country, via democratic means).
Maybe he is only a greedy liar. I don't know. I'm just stating my personal belief/speculation.
>I would bet money/Manifoldbux that if he thought powerful AGI/ASI were anywhere near, he'd hit the brakes and initiate a massive safety overhaul.
Not sure how you can believe this given all of his recent actions and the ever growing list of whistleblowers dropping out of OpenAI explicitly saying Safety is not taken seriously.
I mean just generally the ability to actually stop and reorient around working on safety seems incredibly non trivial. To say nothing of the race dynamic he has perpetuated, the other frontier companies are unlikely to do the same.
So if I contributed IP to ChatGPT on the basis that OpenAI was a non-profit and they relicense can they sell my IP?
That seems like fraud to me.
Didn't altman say 'pwease wet us ignowe copywhite waw! we can't be pwofitabwe if we don't...' in some legal forum recently?
Can they at least change the name to from OpenAI to something else, and leave gutted OpenAI as the non-profit shell..
I'm wondering what this will change. This is probably naive from me because I'm relatively uneducated on the topic, but it feels like open-ai has never really worked like your typical non profit (eg keeping their stuff mostly closed sourced and seeking a profit)
The jokes write themselves!
Can we all agree that the next time a company announces itself (or a product) as "open", we'll just laugh out loud?
I can't think of a single product or company that used the "open" word for something that was actually open in any meaningful way.
Most of us laughed out loud this time too, for this very same reason. But it is fun to watch the rest of y'all learn :)
Based on what I've read it is allowed for a non profit to own a for profit asset.
So I'm assuming the game plan here is to adjust the charter of the non profit to basically say we are going to still keep doing "Open AI" (we all know what that means), but through the proceeds it gets by selling chunks of this for-profit entity, so the essence could be the non-profit parent isn't fulfilling its mission by controlling what openai does but how it puts the money to use it gets from openai.
And in this process, Sam gets a chunk (as a payment for growing the assets of the non-profit, like a salary/bonus) and the rest as well....?
I went through something similar with a prior startup. Though, it wasn't anything nefarious, like this.
Basically, the plan was to create a new for-profit entity then have the not-for-profit license the existing IP to the for-profit. There were a lot of technicalities to it, but most of that was handled by lawyers drawing up the chartering paperwork.
It's worth noting that of OpenAI's 13 original founders, 10 have now left the company and 1 more is on leave, leaving only Sam and Wojciech.
Safe AI, altruistic AI, human-centric AI, are all dead. There is only money-generating AI. Fuck.
https://x.com/yacineMTB/status/1839039293961961543
so much for sam "i have no equity" altman
The restructuring is designed in part to make OpenAI more attractive to investors
I'm not surprised in the least.
Who is going to give billions to a non-profit with a bizarre structure where you don't actually own a part of it but have some "claim" with a capped profit? Can you imagine bringing that to Delaware courts if there was disagreement over the terms? Investors can risk it if it's a few million, but good luck convincing institutional investors to commit billions with that structure.
At that point you might as well just go with a standard for-profit model where ownership is clear, terms are standard and enforceable in court and people don't have to keep saying "explain how it works again?".
Then why keep the name OpenAI?
This would have been the perfect time to change it, but maybe soon if not at same time as any official announcement.
It's hard to say if there is much brand value left with "OpenAI" - lots of history, but lots of toxicity too.
At the end of the day they'll do as well as they are able to differentiate and sell their increasingly commoditized products, in a competitive landscape where they've got Meta able to give it away for free.
It's a widely known brand, even by people outside of the industry. Why would they change it? Their AI was never really open to begin with, so nothing really change on that front
"Doublethink means the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them". -1984
Open(YourWallet)AI
Microsoft needs to lie due to pervasive ill-will from their previous abuses.
Some people will always manage to blame MSFT, even for someones else shadiness, lol.
Consider adding some EEE
I remember a time when promises meant something. Lots of epics in human time (Greek, Hindu), people would stick to their word and commitment was respected. Written word was much more powerful than spoken. People appreciated depth. Wish we could teach and learn from those times.
Proto-Indo-European culture seems to have placed a great deal of importance on the sanctity of contracts and the notion of reciprocal hospitality, reflected in many descendant myths and etymologies surviving from Ireland through India. If the Indo-Europeans did indeed come from the Ukrainian steppes, as seems likely, this may be a reflection of their high mobility (on horseback) causing lots of contact with potential for friction, and the fact that important personal property (for a steppe society, mainly herd animals) was moveable and vulnerable to cattle rustling. There's some great books on Indo-European society if you're interested.
With no centralised justice system people had to rely on people keeping their word. If people had lied and cheated all the time their society would have collapsed.
An oath breaker didn’t just harm an individual, they did harm to the whole community, and the whole community viewed them negatively.
Yes, though that could apply to any pre-modern society, whereas the Indo-Europeans were especially caught up on contracts and hospitality, even compared to similar societies. It's all quite fascinating, and in the context of them going on take over a vast swathe of Eurasia, one wonders whether this kind of ritualised deal-making was a significant competitive advantage that their neighbours lacked at the time.
> Proto-Indo-European culture seems to have placed a great deal of importance on the sanctity of contracts and the notion of reciprocal hospitality ... There's some great books on Indo-European society if you're interested.
What are those books?
For PIE, the most accessible recent book in English is probably The Horse, the Wheel, and Language (Anthony 2007), and I would highly recommend it. (It pulls double duty as a laymen's and as an academic publication, so if you do read it, know that it's OK to skip the minutiae of pottery shards.)
A slightly older but enduringly popular work is In Search of the Indo-Europeans: Language, Archaeology, and Myth (Mallory 1989). I'm told How to Kill a Dragon: Aspects of Indo-European Poetics (Watkins 1995) is very good too, but I have not read it myself.
Chapter 2 of Indo-European Language and Culture: An Introduction (Fortson 2004) is a very good summary of PIE culture. The book is excellent in general - probably the best English language introduction to PIE linguistics at the moment - but outside the first two chapters it is not generally accessible to laymen.
If you read other European languages it's worth checking out other books that may be available to you. The field by definition requires the ability to read a decent number of languages, so the literature is spread out across English, German, French, Russian, etc.
This nation’s largest institutions were founded on deceit from the colonies to the founding fathers.
Aaron Burr raised capital for a fake water company and applied for a banking charter for what is now JP Morgan Chase
some people are playing by a more effective set of rules and others are being lied to from a young age
I called this 9 months ago: https://news.ycombinator.com/item?id=38560352
OpenAI is Microsoft's AI R&D spin-off and Microsoft means business.
Fund your startup by masquerading as a non profit for a few years and collecting donations, genius!
The stinking peasants will never realize what's happening until it's too late to stop!
It's really hard to stick to your original goals after you achieve unexpected success. It's like a politician making promises before the elections but finding it difficult to keep them once elected.
On March 1st, 2023, a warning was already sounding: OpenAI Is Now Everything It Promised Not to Be: Corporate, Closed-Source, and For-Profit (https://news.ycombinator.com/item?id=34979981)
Works where archive.ph is blocked:
https://www.msn.com/en-us/money/other/openai-to-become-for-p...
Text-only:
https://assets.msn.com/content/view/v2/Detail/en-in/AA1rcDWH
[dupe] more discussion:
https://news.ycombinator.com/item?id=41651548
That one never made it to the front page because reasons. All that discussion was people reading the story elsewhere and going looking for the HN thread.
never made it? That's the thread. The discussion is there. Long before this one. Lots of people saw it, commented on it. It's a dupe. Stop splitting the discussion up.
It was never above page 4 (position 90):
https://hnrankings.info/41651548/
This version of the thread is the first to have had any traction on the front page.
When the algorithm artificially stops a topic from surfacing to the front page, the article that finally makes it past the algorithm's suppression is not a duplicate, it's the canonical copy.
So what if it didn't make the front page. That doesn't mean ppl didn't see it. Doesn't mean ppl aren't commenting on it. Maybe it's just not that interesting. There was also a lot of other big news at the same time with Meta etc taking attention. And followed by the other OpenAI news with Mira. Again, the discussion is there.
Value vs Morality. Only time will tell who wins.
In many SV denizens' heads, they're one in the same.
Which is why we need to reopen more asylums and bring back involuntary commitment.
I’d guess it would be legally not possible to turn a non-profit into a for-profit company, no matter how confusing the company structure gets. And even (or rather, especially) if the project disrupts the economy on a global level. I’m not surprised that this is happening, but how we got here - I don’t know.
Any reporting on the impact this is having on lower level employees? My understanding is they are all sticking around for their shares to vest (or RSU's I guess).
but still, you'd think some of them would have finally had enough and have enough opportunities elsewhere that they can leave.
the openai team, including the tech community, should've sided with the board, not sam. the fact that ilya had a hand in it should've given it weight and backing.
"openai is nothing without its people." well, the key people left. soon, it will just be sam and his sycophants.
So many red flags about Saltman. I have to imagine some of the investors are having second thoughts.
Some number must be people who only care about winning like Sam. Plus they're getting huge returns.
I get strong "next Mark Zuckerberg" vibes from Sam. Build a zombie product that approaches worthlessness after a few years, but made himself hugely rich in the process, and buys off tech and people as needed to maintain some kind of relevance.
OpenAI couldn't even align their Sam Altman and their people to their non-profit mission. Why should you ever believe they will align AGI to the well being of humanity?
What happened to all the people making fun of Helen Toner for attempting to fire Sama? She and Ilya were right.
Probably one of the many decisions that Mira and other original founders were against.
Sam Altman is a poison pill.
Mira joined in 2018. OpenAI was founded in 2015.
Boo this man, booo.
When will they start adding ads to the AI output? Seems that's the next logical step.
The good thing is, we need to worry about AGI because we already know what it's like in a world populated by soulless inhuman entities pursuing their own selfish aims at the expense of mankind.
On what planet would Elon not get a piece of this new for-profit company?
Earth
Here is the story without a paywall https://www.reuters.com/technology/artificial-intelligence/o...
It's hilarious that this should surprise anyone at all, or that Sam Altman is anything but a mendacious, self-serving, compulsive liar of the worst tech world kind. For example, Elon Musk gets lots fo hate for all kinds of things. Some of it is very valid, but much of it also goes to the point of there being derangement syndrome around him, partly (I suspect) because of his openly stated zeitgeist-contrary political beliefs, yet i'd pick his sometimes crude, bullying but fundamental openness about who he is any day over the shiny paint job of platitudes and false correctness found in someone like Altman. Not to mention that the overall value of Musk's companies trumps anything I've seen done by Altman's sludge-pumping AI technology so far. This last is of course not a moral judgement but a practical one.
Objectively, they’re both no good.
Monday to come after Sunday, in revised push for transparency
I'm willing to pair up with fundamentalist christians to derail this with the argument that he/this is satan/the end of the world.
Wait.. Sam Altman also owns (or did own) ycombinator?
What a surprise!!!! I would have never said so...
For profit it will be when it will be profitable.
When a company makes such a transition are they liable for any sort of backdated taxes/expenses they avoided as a non-profit?
Should be renamed to NonOpenAI,or MoneyMattersAI
ClosedAI or PrivateAI
Saw someone on HN call it NopenAI
Good, I would do the same because it's a reasonable thing to do. It's easier to succeed as a for-profit.
Succeed off of lies and deceit to gain goodwill from workers and governments.
Ethics aside, I think there’s a silver lining to all this: at least they believe this can be profitable
I do wonder if this is why Mira left, as one of the non-profit board members.
Sounds like a liquidity even to me. Time to pay taxes on 150B in equity.
a couple of other discussions going on including this one with non-paywall op:
https://news.ycombinator.com/item?id=41651548
There is an post with 500 comments that was posted before this one. Why didn't that post make it to the top? I know Y Combinator used to have Sama has a president but you can't censor this type of big news in this time and age
Stop believing that these companies and people are benevolent.
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.
Now we know why people like Ilya, Brockman, Murati, etc. left the company.
Wonder what happens to the employee's equity.
Why were they a non-profit in the first case?
I imagine for tax reasons?
Why the h are they called "openAI" too? nothing is open for them but your own wallet.
Guess what they mean is for loss company
Will they be rebranding to ClosedAI?
Oh! You don't say.
That's a lot of words for Micro$oft to say they just love money. Who knew!
Ahh the American way
Quelle surprise.
Reminds me of what my first-year econ professor in college once stated after disabusing myself and some other undergrads of our romantic notions about how life should work.
"Do I shock you? This is capitalism."
Now the real question is - will they finally drop the "Open" part?
an AGI is showering us with irony
Shocking
Good. Now it is just a matter of profit-making company.
Liars
i remember years ago i saw a video of sam altman interviewing elon musk. it was filmed inside the spacex factory. maybe you know the one? i didnt know who sam was at the time. i remember being very, very put off by the way sam was behaving. he had this bizarre, almost unbelievable expression on his face, almost like he was pantomiming as a child looking up at his parents, adoring them. this weird, fake shy-smile. and i remember immediately having an intense disliking of him. this person seemed extremely fake, manipulative and narcissistic. it was such low-level behavior that i thought it must be some intern or someone way out of their depth. this interview is some kind of fluke. its so unbelievably insane to me that this person, who i disliked so much that i remembered him even without knowing his name or who he was, is now at the helm of one of the most important developments in human history. and the subject of todays headline is no surprise at all... i think everyone should think very carefully about the fact that sam altman will at some point, probably, be the very first person in the world to sit down in front of a console and hold the reigns directly and without supervision to a super-intelligent system that does not bear any of the regulatory or moral restrictions that would stop it from taking over the world. this evil narcissist, liar, money hungry, power grabbing A* hole will hold the most power that any human has ever held. do you really want that?
And the enshittification process begins.
shocked. shocked! well not that shocked.
Become? lol
Huh? I thought they already had for-profit and non-profit entities? Is the non-profit entity just going away (paywall)? gross.
Relatedly, dalant979 found this fascinating bit of history: https://old.reddit.com/r/AskReddit/comments/3cs78i/whats_the...
Yishan Wong describes a series of actions by Yishan and Sam Altman as a "con", and Sam jumps in to brag that it was "child's play for me" with a smiley face. :)
> and Sam jumps in to brag
I never read that as a brag, but as a sarcastic dismissal. That’s why it started with “cool story bro” and “except I could never have predicted”. I see the tone as “this story is convoluted” not as “I’ll admit to my plan now that you can’t do anything about it”.
That’s not to say Sam isn’t a scammer. He is. It just doesn’t seem like that particular post is proof of it. But Worldcoin is.
https://www.buzzfeednews.com/article/richardnieva/worldcoin-...
https://www.technologyreview.com/2022/04/06/1048981/worldcoi...
If I understand the history correctly, Yishan (the former Reddit CEO) is talking about himself when he talks about a CEO in this story, and so Yishan's post is a brag, with a thin denial tacked on at the end. That's why I believe that Sam (Yishan's friend) is also engaging in thinly-veiled bragging about these events.
Here is Yishan's comment with his name spelled out for clarity instead of just saying "CEO":
-- yishanwongMy understanding of what Sam meant by "I could never have predicted the part where you resigned on the spot" was that he was conveying respect for Yishan essentially out-playing Sam at the end (the two of them are friends) by distancing himself (Yishan) from the situation and any potential liability in order to leave Sam "holding the bag" of possible liability.
The board drama part and key people leaving seem oddly familiar.
The fact that this has just disappeared from the front page for me, just like the previous post (https://news.ycombinator.com/item?id=41651548), somehow leaves a bitter taste in my mouth.
The previous post never entered the front page at all:
https://hnrankings.info/41651548/
It somehow got enough attention to get to 300+ votes while being entirely suppressed from the front page.
This one looks like it triggered a flag before being fixed:
https://hnrankings.info/41655954/
https://hnrankings.info/41655954/
Looks like it was flagged, before being brought back by an admin. This happens quite often.
Look at the URL. It’s because the original WSJ title was “OpenAI Chief Technology Officer Resigns,” which was a dupe of yesterday’s discussions. WSJ changed the title yesterday evening.
I noticed that, too. It does seem 'odd'.
I found this on the front page an hour after you made this comment.
Yeah hope for some transparency here
You can't post content critical of some HN darlings without being flagged by their fans
How do you explain all of the constant unflagged criticism of OpenAI and Sam Altman throughout nearly every OpenAI thread? I mean, look around at all of the comments here...
Mods, probably
The IRS should get involved. This is a cut and dry case of embezzlement of 501c3 resources.
Ahh. What a surprise - no-one could have predicted this
Seeing so much money rolling in, hard to not want a slice of the pie.
What money? Aren't most (all?) AI companies are operating at a loss?
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.
I think the people getting salaries are doing just fine
Well they are spending billions to make shovels that they are selling for millions (roughly).
Hi, you are new here. Welcome to tech.
OpenAI is losing billions in the way Uber lost billions - through poor management.
When/if Altman ever gets out of the way like Travis K did with Uber then the real business people can come in and run the company correctly. Exactly like what happened with Uber - who never turned a profit under that leadership in the US and had their lunch eaten by a Chinese knock-off for years abroad. Can't have spoiled brats in charge, they have no experience and are wasteful and impulsive. Especially like Altman who has no engineering talent either. What is his purpose in OpenAI? He can't do anything.
Only hard if you're that kind of person. Not everyone is like that. And those kind of people have difficulty believing this.
It's a "courage isn't the absence of fear" sort of situation.
I don't think there's many people out there who would not be tempted at all to take some of that money for themselves. Rather, people are willing and able to rise above that temptation.
Ehh, there's a lot of space between "desperately in need" and "wanting to seize billions in equity".
Everyone is like that when the number is potentially in the trillions. There are just people who are like that and people who think they aren’t because they’ve never been within a digit grouping of it.
Illustrating that part of the parent comment:
> And those kind of people have difficulty believing this.
> Everyone is like that when the number is potentially in the trillions
No, we're really not all like that.
I stopped caring about money at 6 digits a decade ago, and I'm not even at 7 digits now because I don't care for the accumulation of stuff — if money had been my goal, I'd have gone to Silicon Valley rather than to Berlin, and even unexciting work would have put me between 7 and 8 digits by this point.
I can imagine a world in which I had made "the right choices" with bitcoin and Apple stocks — perfect play would have had me own all of it — and then I realised this would simply have made me a Person Of Interest to national intelligence agencies, not given me anything I would find more interesting than what I do with far less.
I can imagine a future AI (in my lifetime, even) and a VN replicator, which rearranges the planet Mercury into a personal O'Neill cylinder for each and every human — such structures would exceed trillions of USD per unit if built today. Cool, I'll put a full-size model of the Enterprise D inside mine, and possibly invite friends over to play Star Fleet Battles using the main bridge viewscreen. But otherwise, what's the point? I already live somewhere nice.
> There are just people who are like that and people who think they aren’t because they’ve never been within a digit grouping of it.
Does it seem that way to you because you yourself have unbounded desire, or because the most famous business people in the world seem so?
People like me don't make the largest of waves. (Well, not unless HN karma counts…)
There definitely are people who aren't like that. Not a lot for sure, but they exist.
What you're showing me is you don't know very many different people.
There are many examples through history proving you wrong.
* Frederick Banting sold the patent for insulin to the University of Toronto for just $1.
* Tim Berners-Lee decided not to patent the web, making it free for public use.
* Jonas Salk refused to patent the polio vaccine - "can you patent the sun?"
* Richard Stallman and Linus Torvalds could have easily sold humanity out for untold billions.
* Chuck Feeny silently gave away $8bn, keeping only a few million.
... And in any case, this is an extreme situation. AI is an existential threat/opportunity. Allowing it to be sidestepped into the hands of Sam "sell me your retinal scans for $50" Altman is fucking insane, and that's putting it lightly.
Will they finally rename the company?
Omni Consumer Products, or Altman-Yutani Corporation would be nice
ClopenAI
I hope some journalist popularizes "clopen" as a neologism to describe organizations that claim to be open and transparent but in practice are closed and opaque.
Or "clopen-source software", projects that claim to be open-source but vital pieces are proprietary.
Probably most people here don't know this (and probably not totally universal), but a "clopen" is what you call it when you have to work a morning shift the day after having worked an evening shift.
Idk if that was parent's ref, but clopen is a term used in topology
Is the name Worldcoin available?
It is not. But you can remove some letter like 'i' for example.
ClosedAF
Renaming to "TheAI" would match their ambition for AGI.
Drop the "The", just "AI"
Altman Intelligence Inc.
Sure. Since AI is closed now, they will try 'OpenAGI'.
PigpenAI
"Shocking!" It's a shame that one of the biggest advancements of our time has come about in as sleazy a way as it has.
Reputationally... the net winner is Zuck. Way to go Meta (never thought I'd think this).
Reuters had the exclusive yesterday but somehow it never surfaced for long here:
"OpenAI to remove non-profit control and give Sam Altman equity"
https://www.reuters.com/technology/artificial-intelligence/o...
It appeared but was buried on the second page and never made it to the front page, for some weird reason. Some in the discussion speculated that it was due to a flame war detection algorithm:
https://news.ycombinator.com/item?id=41651548
"for some weird reason" when Altman was an important player at YC and PG still sings his praises.
Thank you dalant979 for finding a previous pattern of behavior also by Sam with a similar structure to what we have seen unfolding on the board of OpenAI.
https://news.ycombinator.com/item?id=41657001#41657014
I guess this vindicates the (original) OpenAI Board, when they tried to fire Sam Altman.
This post somehow fell off the front page before California wakes up (9:07 ET), but not buried deep like buried posts usually are:
> 57. OpenAI to Become For-Profit Company (wsj.com) 204 points by jspann 4 hours ago | flag | hide | 110 comments
This is great. Sam tried the non-profit thing, it turned out not be a good fit for the world, and he's adapting. We all get to benefit from seeing how non-profits are just not the best idea. There are better ways to improve the world than having non-profits (for example, we need to abolish copyright and patent law; that alone would eliminate the need for perhaps the majority of non-profits that exist today, which are all working to combat things that are downstream of the the toxic information environment created by those laws).
Yes, Altman not having 7% of the company was not a good fit for the world.
I hope they rename the company soon, it’s a disgrace to call it “open”
And suddenly Altman's firing no longer seems so crazy
"suddenly"?
I was under the impression that most people saw this coming years ago. The second "Open"AI refused to release the weights for GPT-2 for our "safety" (we can see in hind sight how obviously untrue this was, but most of us saw it then too) it was clear that they were headed towards profitability.
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Woah, the pompous eccentric billionaire(?) is actually not altruistic, never heard this story before!
/s
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I’m waiting for pg and others to excuse this all by posting another apologetic penance which reminds us that founders are unicorns and everyone else is a pleb.
pg is sama’s biggest DR-er (interpret this as you will).
They have that Michael Scott & Ryan energy.
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another mozilla. it’s time for guillotines. past time.
Are you meaning to tell me that the whole nonprofit thing was just a shtick to get people to think that this generation of SV "founders" was going to save the world, for real this time guys?
I'm shocked. Shocked!
I better stock up on ways of disrupting computational machinery and communications from a distance. They'll build SkyNet if it means more value for shareholders.
This is not how nonprofits usually work. This is blatant fraud. I cannot think of any other case besides OpenAI of this particular shenanigan being pulled.
The question isn't whether it has happened before, but whether they will get away with it.
This is for the best really, I can't even think of a non-profit in tech where over time it hasn't just become a system for non-productives to leech from a successful bit of technology while providing nothing and at times even stunting it's potential and burning money on farcical things.
Lot of people unhappy about this yet not at all unhappy (or even caring) about the 1,000s of others who started out for profit. And while we're all here hacking away (we're hackers, right?) many of us with startups, what is it we're chasing? Profit, money, time, control. Are we different except in scale? Food for thought.
It's not what they're doing (trying to earn money), but it's how they're doing it (in a very unethical and damaging way), while trying to whitewash themselves.
It’s criminal. Many people donated money, worked for them, gave data, etc. on the promise that OpenAI was working towards the public good. It turns out those transactions occurred under false pretenses. That’s fraud.
How is this food for thought? OpenAI had an unfair advantage by starting out as a non-profit.
What stopped others doing this? Or is stopping others doing this?
Their conscious? The fact they aren't pieces of shit?
I'm sorry, have we gotten so far up our own asses as a profession that we no longer just excuse unethical behavior, we actually encourage it?
Ethics?
> Profit, money, time, control
I feel this only scratches the surface of what to chase in life. And in respect to a potentially singular, all-knowing piece of technology, not necessarily a goal people want to embue.
In any thread about companies that have some amount of hype around them, it’s difficult to tell the difference between comments coming from people with legitimate concerns about the issues at hand vs cynical people that have found their latest excuse to glom on to outrage against hype.
Your food is undercooked
That's a little unfair.
If you don't mind me asking, what generation are you from? Perchance you're newer than me to Earth, among those who find it hard that others have different opinions?
I see your point but I think it's fine to be angry and disappointed that an outfit that appeared to be trying to do it differently has abandoned the effort.
Perhaps it's the only way to survive?
And what comes first, the mission, or being able to tell people you did your best but failed to build the thing you set out to build?
Perhaps most of us are more interested in fairness than progress, and that's fine.
Altman and OpenAI deserve their success. They’ve been key to the LLM revolution and the push toward AGI. Without their vision to make a product out of an LLM that hundreds of millions of people now use and have greatly enriched their lives, companies like Microsoft, Apple, Google, and Meta wouldn’t have invested so heavily in AI. While we’ve heard about the questionable ethics of people like Jobs, Musk, and Altman, their work speaks for itself. If they’re advancing humanity, do their personal flaws really matter?
> advancing humanity Perhaps but I'd say it's more of a mixed bag. Cell phones and social media have done harm and good at very large scales. As Dan Carlin once said, it feels like we're babies crawling toward hand guns. We don't seem like we're as wise as we are technically proficient.
Oppenheimer "advanced humanity" by giving us nuclear power. Cool. I love cheap energy. Unfortunately, there were some uh... "unfortunate side-effects" which continue to plague us.
Do you really want people who have a lot of power to have serious flaws? Looking back into history it doesn't end up good usually.
> If they’re advancing humanity, do their personal flaws really matter?
What's being discussed in this thread is not the personal failings of silicon valley darlings, but whether one of them just defrauded a few thousand people and embezzled a significant amount of capital. Citing his character flaws goes along with it though.
Are you seriously arguing that people should be exempt from law for "advancing humanity"? Because I don't see any advancements whatsoever from all of the people mentioned. Altman and Musk would get a hardon for sure though, from being mentioned together with Jobs.
They matter MORE. Are you like, completely unfamiliar with Spiderman and the whole great power great responsibility line??
> If they’re advancing humanity, do their personal flaws really matter?
Well, yeah, they're positioning themselves as some of the most powerful and influential individuals on earth. I'd say any personality flaws are pretty important.
Elon Musk isn't "advancing humanity".
I'm very far from a musk fan, and if you want to make the case that musk isn't responsible for Tesla, SpaceX, and Starlink I think that's a legitimate argument to be made. But I don't think there's much argument to be made that those 3 companies are not advancing humanity.
Tesla and SpaceX would not exist OR prosper, without Musk.
If you want to understand why, read the Walter Isaacson biography of Musk (which is based on accounts by his friends, enemies and employees). He's a hard-arsed manager, he is technically involved at all levels of the company, he is relentless, and he takes risks and iterates like no other CEO.
Considering Musk isn't the founder of Tesla, that's obviously not true. He is the founder of SpaceX so that's probably true that it wouldn't exist without him.
Walter Isaacson doesn't have the best reputation for covering his subjects objectively to be fair. If your source for what Elon has or hasn't done is Isaacson, you aren't standing on very solid ground.
The bigger picture point though is that you can easily argue that the employees at those companies, and not a single man, are responsible for the success of those companies. We give far too much credit to CEOs.
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I'm sure there were people that claimed Nikola Tesla or Henry Ford weren't "advancing humanity" at the time.
There will always be people who disagree with the politics/opinions/alleigances of a successful person and who wish to downplay their success for selfish reasons.
> There will always be people who disagree with the politics/opinions/alleigances of a successful person and who wish to downplay their success for selfish reasons.
And conversely, there will always be people who agree with the politics/opinions/alleigances of a successful person and who wish to overstate the reasons behind their success for selfish reasons.
Please don't besmirch Tesla's good name by comparing him to Musk.