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There are multiple corporate entities that make up "OpenAI". See box diagram: https://images.openai.com/blob/f3e12a69-e4a7-4fe2-a4a5-c63b61f26ab7/org-structure

by jasode 3y ago

There are multiple corporate entities that make up "OpenAI". See box diagram: https://images.openai.com/blob/f3e12a69-e4a7-4fe2-a4a5-c63b61f26ab7/org-structure.svg https://images.openai.com/blob/f3e12a69-e4a7-4fe2-a4a5-c63b6... (image from https://openai.com/our-structure https://openai.com/our-structure) The non-profit entity (OpenAI Inc 501(c)(3)) "owns & controls" the for-profit entity (OpenAI Global LLC). Somewhat similar to non-profit Mozilla Foundation owning the for-profit entity Mozilla Corporation: https://www.mozilla.org/en-US/about/governance/organizations/ https://www.mozilla.org/en-US/about/governance/organizations... The non-profit 501(c)(3) entity doesn't have investors but they have a governing board that made decisions about the for-profit entity that severely degraded its equity value. Investors and employees are very upset about what the 501(c)(3) did.

jacquesm 3y ago
The bad bit is that the board governs all of the entities directly or indirectly, even the ones that nominally would not have been in a position to affect the mission of the company. That creates yet another layer of possible conflicts of interest. For example, they could have allowed the small investors and the employees' entity to be governed by that group, but instead they chose to govern them. This is a mistake that is made quite frequently and one that I always advise against: if you have no stake in an entity you shouldn't be governing it if you have a role elsewhere in the org chart because one day you might find that the interests between those two positions collide.
strangattractor 3y ago
The structure doesn't make a lot of sense to me. A for-profit entity is for making a profit regardless of who governs it. It may in some way make the Effective Altruism people feel better about it but if they wanted that kind of control staying a non-profit was the way forward. Getting an $80 Billion valuation Effectively threw the Altruism out the window. Altman did what every SV CEO would do in his situation - the opportunity to dominate the sector presented itself and he moved to secure it. That is what CEOs do or they get fired. Not only that - that is what the employees want them to do because they get rich.
- ahepp 3y ago
  per FT: > What’s the point of all these subsidiaries? > They’re to give Microsoft a stake in the commercial bit while wearing no responsibility for the Asimov-y stuff that concerns the management layer. This seemed to suit both parties. “From the beginning, [Microsoft] accepted our capped equity offer and our request to leave [artificial general intelligence] technologies and governance for the Nonprofit and the rest of humanity,” they said in 2019. https://www.ft.com/content/6dd292c0-a551-4609-8649-f6b69b20f846 https://www.ft.com/content/6dd292c0-a551-4609-8649-f6b69b20f... (paywalled)

by jasode 3y ago

jacquesm 3y ago

The bad bit is that the board governs all of the entities directly or indirectly, even the ones that nominally would not have been in a position to affect the mission of the company. That creates yet another layer of possible conflicts of interest. For example, they could have allowed the small investors and the employees' entity to be governed by that group, but instead they chose to govern them. This is a mistake that is made quite frequently and one that I always advise against: if you have no stake in an entity you shouldn't be governing it if you have a role elsewhere in the org chart because one day you might find that the interests between those two positions collide.

strangattractor 3y ago

The structure doesn't make a lot of sense to me. A for-profit entity is for making a profit regardless of who governs it. It may in some way make the Effective Altruism people feel better about it but if they wanted that kind of control staying a non-profit was the way forward. Getting an $80 Billion valuation Effectively threw the Altruism out the window. Altman did what every SV CEO would do in his situation - the opportunity to dominate the sector presented itself and he moved to secure it. That is what CEOs do or they get fired. Not only that - that is what the employees want them to do because they get rich.

ahepp 3y ago
per FT: > What’s the point of all these subsidiaries? > They’re to give Microsoft a stake in the commercial bit while wearing no responsibility for the Asimov-y stuff that concerns the management layer. This seemed to suit both parties. “From the beginning, [Microsoft] accepted our capped equity offer and our request to leave [artificial general intelligence] technologies and governance for the Nonprofit and the rest of humanity,” they said in 2019. https://www.ft.com/content/6dd292c0-a551-4609-8649-f6b69b20f846 https://www.ft.com/content/6dd292c0-a551-4609-8649-f6b69b20f... (paywalled)