4 ms·

You have it backwards, the not for profit entity owns the for profit entity. From Wikipedia: > OpenAI is an American artificial intelligence (AI) organization

You have it backwards, the not for profit entity owns the for profit entity. From Wikipedia: > OpenAI is an American artificial intelligence (AI) organization consisting of the non-profit OpenAI, Inc.[4] registered in Delaware and its for-profit subsidiary corporation OpenAI Global, LLC.[5] IKEA [0] and Rolex [1] are structured in a similar manner, although different since they’re not US based. [0] https://en.m.wikipedia.org/wiki/Stichting_INGKA_Foundation https://en.m.wikipedia.org/wiki/Stichting_INGKA_Foundation [1] https://en.m.wikipedia.org/wiki/Hans_Wilsdorf#Hans_Wilsdorf_Foundation https://en.m.wikipedia.org/wiki/Hans_Wilsdorf#Hans_Wilsdorf_...

goodluckchuck 3y ago
What’s the point of the subsidiary? Nonprofits can already raise funds by e.g. selling T-Shirts, baked goods, ai services, etc…
- deleted 3y ago
  [deleted]
- next_xibalba 3y ago
  It is hard to attract multi-billion dollar investments and attract elite AI talent when competing with for-profits. This was the stated reason and makes a lot of sense. The comp packages for elite AI talent is now claimed to be in the range of $10M.
- deleted 3y ago
  [deleted]
- wmf 3y ago
  If a nonprofit has mostly revenue and few donations (Mozilla) the IRS revokes their tax exemption. OpenAI could not have done the Microsoft deal as a nonprofit.
- jltsiren 3y ago
  To maintain a clear separation between for-profit and non-profit activities. If a non-profit operates in a market with for-profit competitors, tax authorities may start considering it a for-profit organization, making all of its income taxable. And maybe to allow choosing the right people for the right job. If the non-profit has an ideological purpose, its leadership should probably reflect that. At the same time, the for-profit subsidiary probably works better under professional management.
- blackoil 3y ago
  Lol, 10 billion dollars of cookies and t-shirts. They'll have to be bigger than Nestle and Zara. To sell AI services, they need to build it and for that they need the money.
- dragonwriter 3y ago
  > What’s the point of the subsidiary Closing the huge fundraising gap OpenAI had as a nonprofit by returning profits from commercial efforts instrumental to, but distinct from, the nonprofits charitable purpose, without sacrififing any governance or control of the subordinate entity.
Sosh101 3y ago
Sounds perverse somehow.
- bastawhiz 3y ago
  It's literally the exact corporate structure of Mozilla.
  - numbsafari 3y ago
    Sounds perverse somehow.
  - moralestapia 3y ago
    Lol, is this supposed to be an argument in favor of that structure? Have you read any news about Mozilla's budget in the past 10 years or so?
    - Intralexical 3y ago
      > Have you read any news about Mozilla's budget in the past 10 years or so? Revenue/Expenses/Net Assets 2013: $314m/$295m/$255m 2018: $450m/$451m/$524m 2021: $600m/$340m/$1,054m (Note: "2017 was an outlier, due in part to changes in the search revenue deal that was negotiated that year." 2019 was also much higher than both 2018 and 2020 for some reason.) 2018 to 2021 also saw their revenue from "Subscription and advertising revenue"— Representing their Pocket, New Tab, and VPN efforts to diversify away from dependence on Google— Increase by over 900%, from $5m to $57m. https://foundation.mozilla.org/en/who-we-are/public-records/ https://foundation.mozilla.org/en/who-we-are/public-records/ Seriously, Mozilla gets shat on all the time, presumably because they're one of the few sources of hope and therefore disappointment in an overall increasingly problematic Internet landscape, and I wish they would be bigger too, but they're doing fine all things considered. Certainly I wouldn't say their problems are due to this particular apsect of their legal structure.
      - yownie 3y ago
        >Seriously, Mozilla gets shat on all the time, presumably because they're one of the few sources of hope and therefore disappointment in an overall increasingly problematic Internet landscape, and I wish they would be bigger too, but they're doing fine all things considered. I think they get shat on all the time because of what you mentioned but also because they consistently fail to deliver a good browser experience for most of their still loyal users. Most of the people I talk to who still use their product do so out of allegiance to the values of FOSS despite the dog-shit products they keep foisting upon us. You'd think we'd wise up several decades in by now.

goodluckchuck 3y ago

What’s the point of the subsidiary? Nonprofits can already raise funds by e.g. selling T-Shirts, baked goods, ai services, etc…

deleted 3y ago
[deleted]
next_xibalba 3y ago
It is hard to attract multi-billion dollar investments and attract elite AI talent when competing with for-profits. This was the stated reason and makes a lot of sense. The comp packages for elite AI talent is now claimed to be in the range of $10M.
deleted 3y ago
[deleted]
wmf 3y ago
If a nonprofit has mostly revenue and few donations (Mozilla) the IRS revokes their tax exemption. OpenAI could not have done the Microsoft deal as a nonprofit.
jltsiren 3y ago
To maintain a clear separation between for-profit and non-profit activities. If a non-profit operates in a market with for-profit competitors, tax authorities may start considering it a for-profit organization, making all of its income taxable. And maybe to allow choosing the right people for the right job. If the non-profit has an ideological purpose, its leadership should probably reflect that. At the same time, the for-profit subsidiary probably works better under professional management.
blackoil 3y ago
Lol, 10 billion dollars of cookies and t-shirts. They'll have to be bigger than Nestle and Zara. To sell AI services, they need to build it and for that they need the money.
dragonwriter 3y ago
> What’s the point of the subsidiary Closing the huge fundraising gap OpenAI had as a nonprofit by returning profits from commercial efforts instrumental to, but distinct from, the nonprofits charitable purpose, without sacrififing any governance or control of the subordinate entity.

Sosh101 3y ago

Sounds perverse somehow.

bastawhiz 3y ago
It's literally the exact corporate structure of Mozilla.
- numbsafari 3y ago
  Sounds perverse somehow.
- moralestapia 3y ago
  Lol, is this supposed to be an argument in favor of that structure? Have you read any news about Mozilla's budget in the past 10 years or so?
  - Intralexical 3y ago
    > Have you read any news about Mozilla's budget in the past 10 years or so? Revenue/Expenses/Net Assets 2013: $314m/$295m/$255m 2018: $450m/$451m/$524m 2021: $600m/$340m/$1,054m (Note: "2017 was an outlier, due in part to changes in the search revenue deal that was negotiated that year." 2019 was also much higher than both 2018 and 2020 for some reason.) 2018 to 2021 also saw their revenue from "Subscription and advertising revenue"— Representing their Pocket, New Tab, and VPN efforts to diversify away from dependence on Google— Increase by over 900%, from $5m to $57m. https://foundation.mozilla.org/en/who-we-are/public-records/ https://foundation.mozilla.org/en/who-we-are/public-records/ Seriously, Mozilla gets shat on all the time, presumably because they're one of the few sources of hope and therefore disappointment in an overall increasingly problematic Internet landscape, and I wish they would be bigger too, but they're doing fine all things considered. Certainly I wouldn't say their problems are due to this particular apsect of their legal structure.
    - yownie 3y ago
      >Seriously, Mozilla gets shat on all the time, presumably because they're one of the few sources of hope and therefore disappointment in an overall increasingly problematic Internet landscape, and I wish they would be bigger too, but they're doing fine all things considered. I think they get shat on all the time because of what you mentioned but also because they consistently fail to deliver a good browser experience for most of their still loyal users. Most of the people I talk to who still use their product do so out of allegiance to the values of FOSS despite the dog-shit products they keep foisting upon us. You'd think we'd wise up several decades in by now.