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> In pursuit of our mission to ensure advanced AI benefits all of humanity, OpenAI remains a capped-profit company and is governed by the OpenAI non-profit. Thi
by ckastner 4y ago
> In pursuit of our mission to ensure advanced AI benefits all of humanity, OpenAI remains a capped-profit company and is governed by the OpenAI non-profit. This structure allows us to raise the capital we need to fulfill our mission without sacrificing our core beliefs about broadly sharing benefits and the need to prioritize safety.
All this time, I was entirely unaware of this.
- Closi 4y agoThe cap is 100x, so assuming Microsoft is investing billions in a current valuation of $29 billion as rumoured, the cap will only really come into place once OpenAI becomes the most valuable company in the world.
- hsavit1 4y agoso pretty much another marketing stunt / scam
- ckastner 4y agoIt must have been in the first round [1], but leaves open the question of whether this is still the case: > Returns for our first round of investors are capped at 100x their investment (commensurate with the risks in front of us), and we expect this multiple to be lower for future rounds as we make further progress. [1] https://openai.com/blog/openai-lp/ https://openai.com/blog/openai-lp/
- roflyear 4y agoIsn't this a wild cap? I'm not an expert but I am aware of private deals that are less than 10x for similar structures.
- Kuinox 4y agoIf they reach AGI, or more simply replace a chunk of workers with AIs, this isn't far fetched to reach these numbers.
- logicchains 4y agoIf they reach AGI, the AGI isn't necessarily going to be happy to work for free.
- lma21 4y agoDo you think AGI will care about wealth at all (whenever this happens)?
- flir 4y agoWealth buys compute cycles (also paperclips).
- freejazz 4y agowhy wouldn't it?
- ben_w 4y agoWealth isn't the same thing to all people, wealth as humans define it isn't necessarily going to be what a superintelligence values. The speed difference between transistors and synapses is the difference between marathon runners and continental drift; why would an ASI care more about dollars or statues or shares or apartments any more than we care about changes to individual peaks in the mid-Atlantic ridge or how much sand covers those in the Sahara?
- freejazz 4y agoWealth doesn't have to be the same thing for everyone for someone to care about. That's evident already because some people care about wealth and others don't. What does the speed difference of transistors have to do with anything? Transistors pale in comparison to the interconnection density of synapses, yet it has nothing to do with wealth either...
- ben_w 4y ago
- WastingMyTime89 4y agoYes, it's pure marketing and totally disingenuous. It's like being called OpenAI while nothing is open. It's interesting research done by terrible people.
- thethimble 4y agoThese “terrible people” seem to have catapulted the world into a generative AI world. They genuinely believe they will build AGI and therefore becoming the world’s most valuable company is a natural consequence. Whether this is possible/probable is a different story, but I think a capped profit structure makes logical sense for the company that is aiming to create AGI. Would you want this technology instead in the hands of a for profit company?
- WastingMyTime89 4y agoIt is a for profit company in everything but name. That's my main complain. It has Musk, Thiel and Livingston amongst its initial investors, all known as the greatest philantropists of our time. /s I don't understand why they put this thin veneer on top of what they are doing. Maybe Thiel was burnt with the bad press surrounding Palantir and this is preventive damage control.
- awestroke 4y agoIt's literally a nonprofit
- eternalban 4y agoThat means absolutely nothing to billionaire control freaks. If OpenAI's products become the next Googlie thing (and here I was worried about Cloudflare <smack head>) then these are the future influencers. This is society mainlined on TikTok levels of manipulation. Surely you have adapted to ChatGPT's requirements for interacting, have you not? There is a name for this: social engineering.
- alexeichemenda 4y ago100x is a great return even for YC standards, but the best returns that business angels, VCs and YC have had is in the order of magnitude of 10000x (yes, ten thousand). So capping at 100x still makes it attractive for investors, yet leaves a lot of potential capital for the non-profit. As one example, Sequoia invested in Airbnb at $0.01 per share, and Airbnb's current stock price is $102, almost exactly 10000x return. This happens more often that you think if you're not in the early stage & top VC world.
- roflyear 4y agoWhen you invest in a company with this structure you're not doing it to make money, you're doing it b/c you believe in the product, that's why those structures exist, from my understanding.
- whimsicalism 4y agoif you believe in the product so much, just donate the money. what you are saying is not true.
- roflyear 4y agoI can only speak to what I'm familiar with, in my experience this has been the case. In my experience these individuals do donate to charity, but OpenAI is not a charity.
- CBarkleyU 4y ago> but OpenAI is not a charity. Something doesnt have to be a charity to be donated money towards. The question was: Why aren't they donating the money? The answer is: Because the want to make money. Just FYI: OpenAI tried going the non-profit route, it didnt work, because suprise, suprise, in the grand scheme of VC things nobody wants to donate 10 billion dollars to anything.
- 4y ago
- alkjsdlkjasd 4y agoArticle about it here: https://techcrunch.com/2019/03/11/openai-shifts-from-nonprofit-to-capped-profit-to-attract-capital https://techcrunch.com/2019/03/11/openai-shifts-from-nonprof... > Profits emerging from the LP in excess of the 100x multiplier go to the nonprofit, which will use it to run educational programs and advocacy work. > The board [of the non-profit] is limited to a minority of financially interested parties, and only non-interested members can vote on “decisions where the interests of limited partners and OpenAI Nonprofit’s mission may conflict”
- drexlspivey 4y agoHow does this cap work in practice? If I bought shares at $1 and someone wants to buy them from me at $200 what happens?
- dorkwood 4y agoThey keep it, but it goes to the non-profit arm of their business. “But any returns beyond that amount… are owned by the original OpenAI Nonprofit entity.” https://openai.com/blog/openai-lp/ https://openai.com/blog/openai-lp/
- drexlspivey 4y ago> The fundamental idea of OpenAI LP is that investors and employees can get a capped return if we succeed at our mission Sorry I still don’t get it. If a private equity investor has shares and another investor wants to buy them off of him at 200x they can do that right? Are they obliged to give any excess returns to the non profit? Can’t they just sell the shares at 50x and then buy them back (perhaps through some other entity) to get around that trivially? Or does this refer to return from dividents?
- whimsicalism 4y agoMy guess is it likely has to do with dividends. But if your returns from the stocks are capped at 100x your share value, an efficient market would mean you share value never grows 200x.
- Throwaway045814 4y agoIt's not just about that. Perhaps there are benefits in having control of the company that make the shares more valuable than just the profit would make it out to be. Perhaps there's prestige in owning these shares.
- tnel77 4y agoSince OpenAI isn’t publicly traded, I don’t think it’s an issue. If they were to go public, rather than being purchased by Microsoft, I’d guess that this cap would go away. Wall Street isn’t know for caring about poor people.
- timf34 4y ago100x on profits* just for clarity
- lonelyasacloud 4y agoGoogle apparently has a market cap of around $1.200 Trillion based [0] largely on (for 2021) revenue of 256.7 billion U.S. dollars, of which 209.49 billion U.S. dollars came from advertising [1]. It's apparently fourth on the list of valuable companies [4] If OpenAI takes a good chunk of Google's ad revenues then it doesn't seem that fanciful that it'll be up toward the top of market caps. [0] https://companiesmarketcap.com/alphabet-google/marketcap/ https://companiesmarketcap.com/alphabet-google/marketcap/ [1] https://www.statista.com/statistics/266206/googles-annual-global-revenue/ https://www.statista.com/statistics/266206/googles-annual-gl... [2] https://businessplus.ie/news/most-valuable-companies/ https://businessplus.ie/news/most-valuable-companies/
- tyre 4y agoHow would OpenAI take a majority of AdWords inventory? Maybe it could write the ads but you’re paying for placement.
- llampx 4y agoPlacement on what? Search results that no one is using anymore?
- whimsicalism 4y ago> If OpenAI takes a good chunk of Google's ad revenues then it doesn't seem that fanciful that it'll be up toward the top of market caps. OpenAI taking a large chunk of Google's ad revenue seems fanciful to me
- napier 4y agoMore likely they bork a large chunk of Google's ad revenue by making information search and retrieval usable again under a UBI rationing to fast but not cheap tiered freemium model. That's before you consider information generation, process management greasing and problem solving potential use cases.
- 4y ago
- brookst 4y agoMarket cap is not a measure of past profits.
- ProAm 4y agoI take this in the same vein as "Patagonia Founder Donates Company to Charity" and view it as a clever shell game.Mostly because Im cynical and have watched SV/VC game way too long to be healthy.
- jrochkind1 4y agoOh, I think it's way more of a marketing scam than the Patagonia thing, which I think was kind of legit. This one doesn't even sound legit, even if they do exactly what they say... which is almost nothing. they aren't even really saying they'll do anything different with regard to profit. Patagonia, I think the founder and his heirs really have given up lots of profit they could have had, immediately, to dedicate it to other causes. (I think?) Nobody's given up anything here.
- mxkopy 4y agoThe Patagonia thing was not legit at all according to Adam Hates Everything: https://www.youtube.com/watch?v=0Cu6EbELZ6I https://www.youtube.com/watch?v=0Cu6EbELZ6I EDIT by "not legit" I mean "not authentic"
- mardifoufs 4y agoThat's a usually pretty unreliable source. Especially since he doesn't seem to know a lot about fiscal/tax laws, in a country he doesn't even live in.
- ProAm 4y agohttps://fortune.com/2022/09/16/patagonia-founder-legal-tax-loophole/ https://fortune.com/2022/09/16/patagonia-founder-legal-tax-l...
- jrochkind1 4y agoThank you, I'm interested in this! If anyone has a good written text account critical of the Patagonia thing, I'm interested in that too; video isn't my preferred consumption format.
- PedroBatista 4y agoI get that these things cost a huge amount of money and there's a "lot of opportunity" ( aka make money and influence ) and I don't have many problems with that, except when the signal vs scumbaggery becomes too much. But what I really hate about this whole OpenAI thing is their chosen path to have their cake and eat it too. Sam Altman seems to be something like the love child of Musk and Zuckerberg and one of the main traits is their lack of honesty. Satya Nadella is.. Satya Nadella, there's a reason he was chosen to be the CEO of Microsoft, and while I enjoy seeing the Google demi-gods squirm, this whole OpenAI non/capped/profit thing stinks and I really don't see anyone involved capable or having the character to be something better than the current tech oligarchy.