3 ms·

So who governs the board? Or who "owns" the company?

chasd00 3y ago
In a 501.3c I think the board is the top. From what I understand they’re usually funded through grants that have requirements that need to be met for each disbursement. If you fail then the money stops but there’s no “firing” the board they just stop getting funds.
milkshakes 3y ago
First, the for-profit subsidiary is fully controlled by the OpenAI Nonprofit. We enacted this by having the Nonprofit wholly own and control a manager entity (OpenAI GP LLC) that has the power to control and govern the for-profit subsidiary. Second, because the board is still the board of a Nonprofit, each director must perform their fiduciary duties in furtherance of its mission—safe AGI that is broadly beneficial. While the for-profit subsidiary is permitted to make and distribute profit, it is subject to this mission. The Nonprofit’s principal beneficiary is humanity, not OpenAI investors. Third, the board remains majority independent. Independent directors do not hold equity in OpenAI. Even OpenAI’s CEO, Sam Altman, does not hold equity directly. His only interest is indirectly through a Y Combinator investment fund that made a small investment in OpenAI before he was full-time. https://openai.com/our-structure https://openai.com/our-structure
- fulladder 3y ago
  Can you explain the third point a little more? If Altman has no meaningful economic interest in the company, what was his motivation for being involved at all? Why did he choose to spend his time this way? I'm aware that Altman has made the same claim (close to zero equity) as you are making, and I don't see any reason why either of you would not be truthful, but it also has always just seemed very odd.
  - plorg 3y ago
    Ideology
  - satvikpendem 3y ago
    > If Altman has no meaningful economic interest in the company, what was his motivation for being involved at all? Why did he choose to spend his time this way? Not everything is about money. He likely just likes the idea of making AI.
    - elcritch 3y ago
      Or be the public face of making the AI along with the power and control from that.
- echelon 3y ago
  This is the weirdest company equity structure I've ever heard of. No wonder this is causing drama.
  - satvikpendem 3y ago
    Mozilla is somewhat similar, it's a non-profit that owns a for-profit entity.
    - jacquesm 3y ago
      And given that FireFox isn't exactly gaining marketshare you can see how well that works for them.
      - desert_rue 3y ago
        A non profit likely doesn’t prioritize growth.
        echelon 3y ago
        At least Mozilla didn't try to abuse congress to achieve regulatory capture.
        jacquesm 3y ago
        That may be so, but it also probably shouldn't let its flagship fundraising entity wither.
  - Keyframe 3y ago
    And then there's IKEA
    - astrange 3y ago
      And Novo Nordisk, Rolex, Heineken, Bose, and the NFL.
gnicholas 3y ago
No one governs the board of a nonprofit, exactly. In this case, it sounds like Sam and his allies are trying to exert pressure on the board by threatening crippling resignations. This puts the board in the position of choosing between pursuing its mission without certain employees, or pursuing business plans that do not align as well with its mission, but with the full complement of employees. It's a tricky situation (and this is just with a basic/possibly-incorrect understanding of what is going on). I'm sure it's much more complicated in reality.

In a 501.3c I think the board is the top. From what I understand they’re usually funded through grants that have requirements that need to be met for each disbursement. If you fail then the money stops but there’s no “firing” the board they just stop getting funds.

milkshakes 3y ago

First, the for-profit subsidiary is fully controlled by the OpenAI Nonprofit. We enacted this by having the Nonprofit wholly own and control a manager entity (OpenAI GP LLC) that has the power to control and govern the for-profit subsidiary. Second, because the board is still the board of a Nonprofit, each director must perform their fiduciary duties in furtherance of its mission—safe AGI that is broadly beneficial. While the for-profit subsidiary is permitted to make and distribute profit, it is subject to this mission. The Nonprofit’s principal beneficiary is humanity, not OpenAI investors. Third, the board remains majority independent. Independent directors do not hold equity in OpenAI. Even OpenAI’s CEO, Sam Altman, does not hold equity directly. His only interest is indirectly through a Y Combinator investment fund that made a small investment in OpenAI before he was full-time. https://openai.com/our-structure https://openai.com/our-structure

fulladder 3y ago
Can you explain the third point a little more? If Altman has no meaningful economic interest in the company, what was his motivation for being involved at all? Why did he choose to spend his time this way? I'm aware that Altman has made the same claim (close to zero equity) as you are making, and I don't see any reason why either of you would not be truthful, but it also has always just seemed very odd.
- plorg 3y ago
  Ideology
- satvikpendem 3y ago
  > If Altman has no meaningful economic interest in the company, what was his motivation for being involved at all? Why did he choose to spend his time this way? Not everything is about money. He likely just likes the idea of making AI.
  - elcritch 3y ago
    Or be the public face of making the AI along with the power and control from that.
echelon 3y ago
This is the weirdest company equity structure I've ever heard of. No wonder this is causing drama.
- satvikpendem 3y ago
  Mozilla is somewhat similar, it's a non-profit that owns a for-profit entity.
  - jacquesm 3y ago
    And given that FireFox isn't exactly gaining marketshare you can see how well that works for them.
    - desert_rue 3y ago
      A non profit likely doesn’t prioritize growth.
      - echelon 3y ago
        At least Mozilla didn't try to abuse congress to achieve regulatory capture.
      - jacquesm 3y ago
        That may be so, but it also probably shouldn't let its flagship fundraising entity wither.
- Keyframe 3y ago
  And then there's IKEA
  - astrange 3y ago
    And Novo Nordisk, Rolex, Heineken, Bose, and the NFL.

gnicholas 3y ago

No one governs the board of a nonprofit, exactly. In this case, it sounds like Sam and his allies are trying to exert pressure on the board by threatening crippling resignations. This puts the board in the position of choosing between pursuing its mission without certain employees, or pursuing business plans that do not align as well with its mission, but with the full complement of employees. It's a tricky situation (and this is just with a basic/possibly-incorrect understanding of what is going on). I'm sure it's much more complicated in reality.