<story><title>OpenAI to become for-profit company</title><url>https://www.reuters.com/technology/artificial-intelligence/openai-remove-non-profit-control-give-sam-altman-equity-sources-say-2024-09-25/</url></story><parent_chain><item><author>pj_mukh</author><text>Occam&amp;#x27;s razor: I think Sam&amp;#x27;s personal narrative is the correct one. He built a non-profit that took off in a way that he didn&amp;#x27;t expect it and now a for-profit is the best way to run the lightning they&amp;#x27;ve caught.&lt;p&gt;In terms of profit, AFAICT, Sam doesn&amp;#x27;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&amp;#x27;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)&lt;p&gt;Is this a different org than when it started? Yes. Was this a dupe from the beginning? I don&amp;#x27;t think so.&lt;p&gt;&amp;quot;But why can&amp;#x27;t he have a more worldly-aligned board looking over his shoulder?&amp;quot;&lt;p&gt;Because we live in California and have a bad taste for governance by committee or worse: governance by constant non-representative democracy (see: Housing).&lt;p&gt;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.</text></item><item><author>throwaway314155</author><text>It&amp;#x27;s about the narrative they tried to create. The spin. It doesn&amp;#x27;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&amp;#x27;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).&lt;p&gt;As you&amp;#x27;ve realized, this should have been (and was) obvious for a long time. But that doesn&amp;#x27;t make it any less hypocritical or headline worthy.</text></item><item><author>throwup238</author><text>I’m confused by this news story and the response here. No one seems to understand OpenAI’s corporate structure or non profits &lt;i&gt;at all.&lt;/i&gt;&lt;p&gt;My understanding: OpenAI follows the same model Mozilla does. The nonprofit has owned a for-profit corporation called &lt;i&gt;OpenAI Global, LLC&lt;/i&gt; 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.&lt;p&gt;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?&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;OpenAI#2019:_Transition_from_non-profit&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;OpenAI#2019:_Transition_from_n...&lt;/a&gt;</text></item></parent_chain><comment><author>feoren</author><text>Sam: &amp;quot;I&amp;#x27;m not in it for the money. I have principles.&amp;quot;&lt;p&gt;World: &amp;quot;But what if it was like, a &lt;i&gt;lot&lt;/i&gt; of money?&amp;quot;&lt;p&gt;Sam: &amp;quot;Oh alright you convinced me. Fuck my principles.&amp;quot;</text></comment>
<story><title>OpenAI to become for-profit company</title><url>https://www.reuters.com/technology/artificial-intelligence/openai-remove-non-profit-control-give-sam-altman-equity-sources-say-2024-09-25/</url></story><parent_chain><item><author>pj_mukh</author><text>Occam&amp;#x27;s razor: I think Sam&amp;#x27;s personal narrative is the correct one. He built a non-profit that took off in a way that he didn&amp;#x27;t expect it and now a for-profit is the best way to run the lightning they&amp;#x27;ve caught.&lt;p&gt;In terms of profit, AFAICT, Sam doesn&amp;#x27;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&amp;#x27;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)&lt;p&gt;Is this a different org than when it started? Yes. Was this a dupe from the beginning? I don&amp;#x27;t think so.&lt;p&gt;&amp;quot;But why can&amp;#x27;t he have a more worldly-aligned board looking over his shoulder?&amp;quot;&lt;p&gt;Because we live in California and have a bad taste for governance by committee or worse: governance by constant non-representative democracy (see: Housing).&lt;p&gt;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.</text></item><item><author>throwaway314155</author><text>It&amp;#x27;s about the narrative they tried to create. The spin. It doesn&amp;#x27;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&amp;#x27;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).&lt;p&gt;As you&amp;#x27;ve realized, this should have been (and was) obvious for a long time. But that doesn&amp;#x27;t make it any less hypocritical or headline worthy.</text></item><item><author>throwup238</author><text>I’m confused by this news story and the response here. No one seems to understand OpenAI’s corporate structure or non profits &lt;i&gt;at all.&lt;/i&gt;&lt;p&gt;My understanding: OpenAI follows the same model Mozilla does. The nonprofit has owned a for-profit corporation called &lt;i&gt;OpenAI Global, LLC&lt;/i&gt; 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.&lt;p&gt;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?&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;OpenAI#2019:_Transition_from_non-profit&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;OpenAI#2019:_Transition_from_n...&lt;/a&gt;</text></item></parent_chain><comment><author>grey-area</author><text>He didn’t build it.</text></comment>