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There is a lot in here but turning a non-profit into a for-profit definitely should be challenged. Otherwise why wouldn't everyone start as a non-profit, devel

There is a lot in here but turning a non-profit into a for-profit definitely should be challenged. Otherwise why wouldn't everyone start as a non-profit, develop your IP, and then switch to 'for-profit' mode once you got something that works? You don't pay income taxes and your investors get write offs.

emodendroket 3y ago
They didn't "turn it into" a for-profit though, they created a separate for-profit arm. This one is unusually successful but that's not an unusual thing for even "regular" charities to do in order to engage in some activities that they wouldn't normally be able to.
- justinzollars 3y ago
  And transferred everything they did to that arm. I'm all for tax avoidance, but the rules should apply to everyone equally. Small ma and pa businesses don't have the money to hire armies of lawyers for these legal machinations
  - emodendroket 3y ago
    I guess "mom-and-pop businesses" are probably not started as charities in the first place in most cases so I don't really get what you are trying to say.
    - cj 3y ago
      He’s making a (valid) point having to do with tax avoidance. Want to open a bakery in your small town? Start it as a 501(3)(c) and promise it’s a charitable endeavor for the local community. Then invest your $500k into the bakery maybe even from your local community (it’s a tax deductible donation!) to get the bakery up and running. Then once it’s turning a profit, ditch the original 501(3)c and replace it with a LLC, S-Corp or C-corp and start paying taxes. (And hope you don’t get sued or audited) His point is mom and pop bakeries aren’t typically sophisticated enough to pull of schemes like this, even if it would save tens of thousands on taxes.
      - danenania 3y ago
        In general the the 501(3)c isn't replaced by a for-profit corp though. The 501(3)c remains and a new for-profit corp is established under its ownership. IANAL but I think the tax issue would likely hinge on how well that $500k was isolated from the for-profit side. If the non-profit has no substantial operations and is just a shell for the for-profit, I could see getting in trouble for trying to deduct that as a donation. But if there's an audit trail showing that the money is staying on the non-profit side, it would likely be fine.
        emodendroket 3y ago
        It seems hard to see what the nonprofit would really be doing in this case since the for-profit seems to be the entire operation.
        danenania 3y ago
        Yes if the for-profit was the entire operation, I think you could definitely have issues with the IRS. It would ultimately depend on your ability to convince either the IRS or a judge that there is some purpose to the nonprofit apart from giving investors in the for-profit side tax deductions.
        vharuck 3y ago
        The nonprofit gave the model to the for-profit. Unless they also gave it to unaffiliated groups, how is that different from a company's R&D division?
- l2silver 3y ago
  Creating a separate for-profit arm is trivially easy.
- lumost 3y ago
  Perhaps the regular charity version of this should also be challenged. This case looks somewhat egregious as the for profit arm was able to fire the board of the non-profit parent. Likewise, openAI is selling "PPU" units, it's entirely unclear if anybody knows what these actually are. It's highly likely in my uneducated opinion that OpenAI will be told to adopt a standard corporate structure in the near term. They will likely have to pay out a number of stakeholders as part of a "make right" setup.
  - emodendroket 3y ago
    I don't think that's very likely at all! But I suppose we'll see. For a good point of comparison, until 2015, when public scrutiny led them to decide to change it, the NFL operated as a nonprofit, with the teams operating as for-profits. Other sports leagues continue to have that structure.
  - viscanti 3y ago
    They didn't actually fire the board of the non-profit. They just said they'd all quit in protest because of an action of the board they all felt was egregious. The board could have stayed and been a non-profit that did nothing ever again. They decided it was better to step down.
    - cma 3y ago
      I believe they have said they decided it was better to step down because of being threatened with suits.
      - Aloisius 3y ago
        I believe it was Helen Toner who claimed an OpenAI lawyer said they were at risk of breaching fiduciary duty if the company fell apart because of the ouster.
- pclmulqdq 3y ago
  They basically did, though. The nonprofit does nothing except further the interests of the for-profit company, and all employees get shares of of the for-profit company. It's not unusual for nonprofits to have spinoffs, but it is unusual for the nonprofit to be so consumed by its for-profit spinoffs.
  - threeseed 3y ago
    > The nonprofit does nothing except further the interests of the for-profit company, and all employees get shares of of the for-profit company OpenAI has always argued that the for-profit is furthering the aims of the non-profit. Also employees can't get shares of the non-profit so of course they would from the for-profit arm.
    - pclmulqdq 3y ago
      That argument will be tested in court. It certainly looks like things are the other way around as of now. Most non-profit employees receive their compensation in the form of a salary. If you need to pay "market rate" competing with organizations that offer equity, you pay a bigger salary. When non-profits spin for-profits off (eg research spinoffs), they do it with a pretty strict wall between the non-profit and the for-profit. That is not the case for OpenAI.
- cush 3y ago
  > in order to engage in some activities that they wouldn’t normally be able to What activities couldn’t they do with their charity arm that required this for-profit arm?
  - emodendroket 3y ago
    I'm not sure specifically in OpenAI's case but the general answer is any activity that would cause the organization to lose tax-exempt status.
- tapoxi 3y ago
  I mean they effectively did. They created a for-profit, moved the bulk of employees there, and when the board attempted to uphold its founding principles they were threatened and forced to resign. What's next? Can the OpenAI nonprofit shell divest itself of the for-profit OpenAI and spend the remainder of its cash on "awareness" or other nonsense?
- behringer 3y ago
  It should definitely be illegal.
V-eHGsd_ 3y ago
i'm not disagreeing with you that going from non-profit to for-profit should be challenged, but doesn't openai still maintain their non-profit? they just added a for-profit "arm" (whatever that means).
sigmoid10 3y ago
This. Even when we ignore the whole ethical aspect of "AI for benefit of humanity" and all that philosophic stuff, there are very real legal reasons why OpenAI should never have been allowed to switch to for profit. They were only able to circumvent this with their new dual company structure, but this should still not be legal.
- samstave 3y ago
  Imagine if as punishment, OpenAI were forced to OpenSource any and all IP that was developed in the non-profit phase of their company? That would be a Nuke in the AI world.
  - __loam 3y ago
    Imagine if instead, they were forced to delete the models they built using all our data without consent. Lets make it a fusion bomb.
    - kmeisthax 3y ago
      The copyright lawsuits against OpenAI are already calling for algorithmic disgorgement.
  - option 3y ago
    Not really. Open source and proprietary models aren't that far from them. They don't have moat. Their main advantage have been people and aleady we see entire Anthropic spinoff, Sutskever absent, Karpathy leave, who is next?
    - pjerem 3y ago
      Their main advantage are their products and their communication. ChatGPT is nice and they managed to impose their API. Open source staying behind commercial products even if they are technically really close … ? I think I have already seen this.
    - adventured 3y ago
jjjjj55555 3y ago
Isn't this how drugs get developed? Even worse, the research is done using public funds, and then privatized and commercialized later.
- pleasantpeasant 3y ago
  This is a huge problem in the US. Tax-payers are subsidizing a lot of medical advances, then the US government gives it to the private sector, privatizing whatever medical advances were paid by tax-dollars. Socialism seems to create a lot of markets for the Capitalist private sector.
  - liamconnell 3y ago
    Do the private companies get some special IP rights on the public sector research? It seems like in a competitive market, those private companies would have thin margins. What stops a lower cost competitor from using the same public IP? I’m clearly missing something important here.
    - suslik 3y ago
      I suspect that's due to the misleading nature of the 'public research, privitized profits' trope. The reality is that publically-funded biomedical (for the lack of better word) science does not generate anything production-ready. Academia produces tens of thousands of papers per year; many of these are garbage, p-hacking or low value - the rest are often contradictory, misleading, hard to interpret or just report a giant body of raw-ish data. It is a very valuable process - despite all the waste - but the result of this is too raw to be actionable. This body of raw 'science' is the necessary substrate for biotechnology and drug development - it needs to be understood, processed, and conceptualised into a hypothesis (which most likely fail) strong enough to invest billions of dollars into. Pharmaceutical industry is the market-based approach to prioritising investment into drug development (what is it, 100B$ p/y?) - and even a leftist who might want to debate in favour of a different economic model would have to agree that this job is hard, important, and needs to be done.
  - 3y ago
ben_w 3y ago
I'm not at all clear on what a "not for profit" status even does, tax wise. In any jurisdiction. They are still able to actually make a profit (and quite often will, because careful balancing of perfect profit and loss is almost impossible and loss is bad), and I thought those profits were still taxed because otherwise that's too obvious as a tax dodge, it's just that profit isn't their main goal?
- emodendroket 3y ago
  Well, you're confused because of your erroneous determination that they're "able to make a profit." They are not. They are able to have positive cash flow but the money can only be reinvested in the nonprofit rather than extracted as profit.
  - ben_w 3y ago
    OK, so for me "positive cash" and "profit" are synonyms, with "[not] extracted" meaning "[no] dividends".
    - emodendroket 3y ago
      As the government sees it, you realize "profit" when you, as an owner of the business, take the money it makes for yourself.
      - Kranar 3y ago
        This is bogus and doesn't even make sense. That would mean that any publicly traded company that didn't issue a dividend didn't make a profit which no one believes. Do you really want to claim that Google has never made any profit?
      - danenania 3y ago
        That's not the case in the US. Depending on corporate structure, if your business makes more revenue than expenses, even if none of it is paid out and it's all kept in the business, you will either owe corporate taxes on that amount (C-Corp or non-pass through LLC) or the full personal income tax rate (pass through LLC).
takinola 3y ago
It would be hard to get investors though. Non-profits can only take donations and not investment. So you would have to develop your IP using your own funds. Plus, most companies are loss making in the early years so it is actually more tax-efficient to have an entity that can recognize those losses for tax purposes and offset them against future losses.
dkjaudyeqooe 3y ago
The replies that say "well the profits go to the non-profit, all's good" miss the reality of these high profit nonprofits: the profits invariably end up in the pockets of management. Most of those are essentially scams, but it doesn't mean that OpenAI isn't just a more subtle scam. The hype and the credulity of the general public play right into this scam. People will more or less believe anything Sam the Money Gushing Messiah says because the neat demos keep flowing. The question is what's we've lost in all this, which no-one really thinks about.
- emodendroket 3y ago
  If your beef with this structure is that executives get paid handsomely I have bad news about the entire category of nonprofits, regardless of whether they have for-profit arms or not.
  - nerdponx 3y ago
    I think they're making the same point as you: "nonprofit" is usually a scam to enrich executives anyway.
    - WalterBright 3y ago
      The D Language Foundation is a non-profit. We formed it so that businesses could have a proper legal entity to donate to. The executives don't get any compensation.
    - binonsense 3y ago
      [flagged]
  - dkjaudyeqooe 3y ago
    I really wouldn't give a shit how much they were paid if we got something more than vague promises. They could release the source with a licence that restricted commercial use, anything they wanted, that still allowed them to profit. Instead we get "AI is too dangerous for anyone else to have." The whole thing doesn't inspire confidence.
amelius 3y ago
Yes, that's the new capitalism. Privatizing profits while socializing risks.
- kennywinker 3y ago
  I think that's been part of the capitalist model since roughly the beginning.
stickfigure 3y ago
You misunderstand how taxes work. Unprofitable businesses of every sort don't pay income taxes. Startups like OpenAI don't pay income taxes because they don't have income. And investors don't get a writeoff merely for investing in a nonprofit; it's not like a donation to a nonprofit (which would be deductable).
- guhidalg 3y ago
  > Startups like OpenAI don't pay income taxes because they don't have income. Where is my $20/month for GPT-4 going then?
  - j7ake 3y ago
    To pay their expenses and salaries.
  - cogman10 3y ago
    Taxes are payed on net income not on individual transactions (barring sales tax). If I make $100 in a year and spend $1000 that year, my income is ($900). How can I spend $1000? Generally through loans and bonds. How do I secure said loans? Generally simply by showing how much VC and income comes in with a business plan that banks accept. But that's the secret to the money flow. That's also partially why the collapse of SVB was such a blow to the tech industry. A LOT of loans were issued by them.
    - guhidalg 3y ago
      Ok got it got it, I was thinking revenue == income, and not income == profit. My bad, financially illiterate I guess.
  - bcye 3y ago
    probably 2x that in GPU costs
  - Aloisius 3y ago
    To the for-profit - which pays taxes on net income.
sebastianconcpt 3y ago
Actually a good point that exposes the potential opportunism of having used the work everyone involved added as mere MVP-product-market-fit until it can go big bucks (and big disruptive and unelected and societally disruptive power).
subsubzero 3y ago
Agree, I believe Elon gave $50M or so in 2018 with the intent that giving this money to the non-profit openAI was going to benefit people with open access to AI systems. Sam Altman has completely thrown out any semblance of law and how non-profits work and closed down the companies whitepapers(GPT papers after 2019 no longer published) and embedded it into Microsoft. This should be a slamdunk legal ruling against this ever happening again.
russdill 3y ago
Ok, but that sounds like something that requires a change in legislation. Suing companies for doing something permissible under the current legal structure just doesn't make sense.
y1426i 3y ago
I think this is a different case. The purpose of OpenAI could not have been achieved had it not been converted to a for-profit organization. Profits are necessary since they incentivize the innovation that AI calls for. Non-profits can never achieve these. Today we all benefit from OpenAI, but its the for-profit Open AI that made it possible. How else would they spend billions on compute and take those large risks, on whose money?

emodendroket 3y ago

They didn't "turn it into" a for-profit though, they created a separate for-profit arm. This one is unusually successful but that's not an unusual thing for even "regular" charities to do in order to engage in some activities that they wouldn't normally be able to.

justinzollars 3y ago
And transferred everything they did to that arm. I'm all for tax avoidance, but the rules should apply to everyone equally. Small ma and pa businesses don't have the money to hire armies of lawyers for these legal machinations
- emodendroket 3y ago
  I guess "mom-and-pop businesses" are probably not started as charities in the first place in most cases so I don't really get what you are trying to say.
  - cj 3y ago
    He’s making a (valid) point having to do with tax avoidance. Want to open a bakery in your small town? Start it as a 501(3)(c) and promise it’s a charitable endeavor for the local community. Then invest your $500k into the bakery maybe even from your local community (it’s a tax deductible donation!) to get the bakery up and running. Then once it’s turning a profit, ditch the original 501(3)c and replace it with a LLC, S-Corp or C-corp and start paying taxes. (And hope you don’t get sued or audited) His point is mom and pop bakeries aren’t typically sophisticated enough to pull of schemes like this, even if it would save tens of thousands on taxes.
    - danenania 3y ago
      In general the the 501(3)c isn't replaced by a for-profit corp though. The 501(3)c remains and a new for-profit corp is established under its ownership. IANAL but I think the tax issue would likely hinge on how well that $500k was isolated from the for-profit side. If the non-profit has no substantial operations and is just a shell for the for-profit, I could see getting in trouble for trying to deduct that as a donation. But if there's an audit trail showing that the money is staying on the non-profit side, it would likely be fine.
      - emodendroket 3y ago
        It seems hard to see what the nonprofit would really be doing in this case since the for-profit seems to be the entire operation.
        danenania 3y ago
        Yes if the for-profit was the entire operation, I think you could definitely have issues with the IRS. It would ultimately depend on your ability to convince either the IRS or a judge that there is some purpose to the nonprofit apart from giving investors in the for-profit side tax deductions.
      - vharuck 3y ago
        The nonprofit gave the model to the for-profit. Unless they also gave it to unaffiliated groups, how is that different from a company's R&D division?
l2silver 3y ago
Creating a separate for-profit arm is trivially easy.
lumost 3y ago
Perhaps the regular charity version of this should also be challenged. This case looks somewhat egregious as the for profit arm was able to fire the board of the non-profit parent. Likewise, openAI is selling "PPU" units, it's entirely unclear if anybody knows what these actually are. It's highly likely in my uneducated opinion that OpenAI will be told to adopt a standard corporate structure in the near term. They will likely have to pay out a number of stakeholders as part of a "make right" setup.
- emodendroket 3y ago
  I don't think that's very likely at all! But I suppose we'll see. For a good point of comparison, until 2015, when public scrutiny led them to decide to change it, the NFL operated as a nonprofit, with the teams operating as for-profits. Other sports leagues continue to have that structure.
- viscanti 3y ago
  They didn't actually fire the board of the non-profit. They just said they'd all quit in protest because of an action of the board they all felt was egregious. The board could have stayed and been a non-profit that did nothing ever again. They decided it was better to step down.
  - cma 3y ago
    I believe they have said they decided it was better to step down because of being threatened with suits.
    - Aloisius 3y ago
      I believe it was Helen Toner who claimed an OpenAI lawyer said they were at risk of breaching fiduciary duty if the company fell apart because of the ouster.
pclmulqdq 3y ago
They basically did, though. The nonprofit does nothing except further the interests of the for-profit company, and all employees get shares of of the for-profit company. It's not unusual for nonprofits to have spinoffs, but it is unusual for the nonprofit to be so consumed by its for-profit spinoffs.
- threeseed 3y ago
  > The nonprofit does nothing except further the interests of the for-profit company, and all employees get shares of of the for-profit company OpenAI has always argued that the for-profit is furthering the aims of the non-profit. Also employees can't get shares of the non-profit so of course they would from the for-profit arm.
  - pclmulqdq 3y ago
    That argument will be tested in court. It certainly looks like things are the other way around as of now. Most non-profit employees receive their compensation in the form of a salary. If you need to pay "market rate" competing with organizations that offer equity, you pay a bigger salary. When non-profits spin for-profits off (eg research spinoffs), they do it with a pretty strict wall between the non-profit and the for-profit. That is not the case for OpenAI.
cush 3y ago
> in order to engage in some activities that they wouldn’t normally be able to What activities couldn’t they do with their charity arm that required this for-profit arm?
- emodendroket 3y ago
  I'm not sure specifically in OpenAI's case but the general answer is any activity that would cause the organization to lose tax-exempt status.
tapoxi 3y ago
I mean they effectively did. They created a for-profit, moved the bulk of employees there, and when the board attempted to uphold its founding principles they were threatened and forced to resign. What's next? Can the OpenAI nonprofit shell divest itself of the for-profit OpenAI and spend the remainder of its cash on "awareness" or other nonsense?
behringer 3y ago
It should definitely be illegal.

V-eHGsd_ 3y ago

i'm not disagreeing with you that going from non-profit to for-profit should be challenged, but doesn't openai still maintain their non-profit? they just added a for-profit "arm" (whatever that means).

sigmoid10 3y ago

This. Even when we ignore the whole ethical aspect of "AI for benefit of humanity" and all that philosophic stuff, there are very real legal reasons why OpenAI should never have been allowed to switch to for profit. They were only able to circumvent this with their new dual company structure, but this should still not be legal.

samstave 3y ago
Imagine if as punishment, OpenAI were forced to OpenSource any and all IP that was developed in the non-profit phase of their company? That would be a Nuke in the AI world.
- __loam 3y ago
  Imagine if instead, they were forced to delete the models they built using all our data without consent. Lets make it a fusion bomb.
  - kmeisthax 3y ago
    The copyright lawsuits against OpenAI are already calling for algorithmic disgorgement.
- option 3y ago
  Not really. Open source and proprietary models aren't that far from them. They don't have moat. Their main advantage have been people and aleady we see entire Anthropic spinoff, Sutskever absent, Karpathy leave, who is next?
  - pjerem 3y ago
    Their main advantage are their products and their communication. ChatGPT is nice and they managed to impose their API. Open source staying behind commercial products even if they are technically really close … ? I think I have already seen this.
  - adventured 3y ago

jjjjj55555 3y ago

Isn't this how drugs get developed? Even worse, the research is done using public funds, and then privatized and commercialized later.

pleasantpeasant 3y ago
This is a huge problem in the US. Tax-payers are subsidizing a lot of medical advances, then the US government gives it to the private sector, privatizing whatever medical advances were paid by tax-dollars. Socialism seems to create a lot of markets for the Capitalist private sector.
- liamconnell 3y ago
  Do the private companies get some special IP rights on the public sector research? It seems like in a competitive market, those private companies would have thin margins. What stops a lower cost competitor from using the same public IP? I’m clearly missing something important here.
  - suslik 3y ago
    I suspect that's due to the misleading nature of the 'public research, privitized profits' trope. The reality is that publically-funded biomedical (for the lack of better word) science does not generate anything production-ready. Academia produces tens of thousands of papers per year; many of these are garbage, p-hacking or low value - the rest are often contradictory, misleading, hard to interpret or just report a giant body of raw-ish data. It is a very valuable process - despite all the waste - but the result of this is too raw to be actionable. This body of raw 'science' is the necessary substrate for biotechnology and drug development - it needs to be understood, processed, and conceptualised into a hypothesis (which most likely fail) strong enough to invest billions of dollars into. Pharmaceutical industry is the market-based approach to prioritising investment into drug development (what is it, 100B$ p/y?) - and even a leftist who might want to debate in favour of a different economic model would have to agree that this job is hard, important, and needs to be done.
- 3y ago

ben_w 3y ago

I'm not at all clear on what a "not for profit" status even does, tax wise. In any jurisdiction. They are still able to actually make a profit (and quite often will, because careful balancing of perfect profit and loss is almost impossible and loss is bad), and I thought those profits were still taxed because otherwise that's too obvious as a tax dodge, it's just that profit isn't their main goal?

emodendroket 3y ago
Well, you're confused because of your erroneous determination that they're "able to make a profit." They are not. They are able to have positive cash flow but the money can only be reinvested in the nonprofit rather than extracted as profit.
- ben_w 3y ago
  OK, so for me "positive cash" and "profit" are synonyms, with "[not] extracted" meaning "[no] dividends".
  - emodendroket 3y ago
    As the government sees it, you realize "profit" when you, as an owner of the business, take the money it makes for yourself.
    - Kranar 3y ago
      This is bogus and doesn't even make sense. That would mean that any publicly traded company that didn't issue a dividend didn't make a profit which no one believes. Do you really want to claim that Google has never made any profit?
    - danenania 3y ago
      That's not the case in the US. Depending on corporate structure, if your business makes more revenue than expenses, even if none of it is paid out and it's all kept in the business, you will either owe corporate taxes on that amount (C-Corp or non-pass through LLC) or the full personal income tax rate (pass through LLC).

takinola 3y ago

It would be hard to get investors though. Non-profits can only take donations and not investment. So you would have to develop your IP using your own funds. Plus, most companies are loss making in the early years so it is actually more tax-efficient to have an entity that can recognize those losses for tax purposes and offset them against future losses.

dkjaudyeqooe 3y ago

The replies that say "well the profits go to the non-profit, all's good" miss the reality of these high profit nonprofits: the profits invariably end up in the pockets of management. Most of those are essentially scams, but it doesn't mean that OpenAI isn't just a more subtle scam. The hype and the credulity of the general public play right into this scam. People will more or less believe anything Sam the Money Gushing Messiah says because the neat demos keep flowing. The question is what's we've lost in all this, which no-one really thinks about.

emodendroket 3y ago
If your beef with this structure is that executives get paid handsomely I have bad news about the entire category of nonprofits, regardless of whether they have for-profit arms or not.
- nerdponx 3y ago
  I think they're making the same point as you: "nonprofit" is usually a scam to enrich executives anyway.
  - WalterBright 3y ago
    The D Language Foundation is a non-profit. We formed it so that businesses could have a proper legal entity to donate to. The executives don't get any compensation.
  - binonsense 3y ago
    [flagged]
- dkjaudyeqooe 3y ago
  I really wouldn't give a shit how much they were paid if we got something more than vague promises. They could release the source with a licence that restricted commercial use, anything they wanted, that still allowed them to profit. Instead we get "AI is too dangerous for anyone else to have." The whole thing doesn't inspire confidence.

amelius 3y ago

Yes, that's the new capitalism. Privatizing profits while socializing risks.

kennywinker 3y ago
I think that's been part of the capitalist model since roughly the beginning.

stickfigure 3y ago

You misunderstand how taxes work. Unprofitable businesses of every sort don't pay income taxes. Startups like OpenAI don't pay income taxes because they don't have income. And investors don't get a writeoff merely for investing in a nonprofit; it's not like a donation to a nonprofit (which would be deductable).

guhidalg 3y ago
> Startups like OpenAI don't pay income taxes because they don't have income. Where is my $20/month for GPT-4 going then?
- j7ake 3y ago
  To pay their expenses and salaries.
- cogman10 3y ago
  Taxes are payed on net income not on individual transactions (barring sales tax). If I make $100 in a year and spend $1000 that year, my income is ($900). How can I spend $1000? Generally through loans and bonds. How do I secure said loans? Generally simply by showing how much VC and income comes in with a business plan that banks accept. But that's the secret to the money flow. That's also partially why the collapse of SVB was such a blow to the tech industry. A LOT of loans were issued by them.
  - guhidalg 3y ago
    Ok got it got it, I was thinking revenue == income, and not income == profit. My bad, financially illiterate I guess.
- bcye 3y ago
  probably 2x that in GPU costs
- Aloisius 3y ago
  To the for-profit - which pays taxes on net income.

sebastianconcpt 3y ago

Actually a good point that exposes the potential opportunism of having used the work everyone involved added as mere MVP-product-market-fit until it can go big bucks (and big disruptive and unelected and societally disruptive power).

subsubzero 3y ago

Agree, I believe Elon gave $50M or so in 2018 with the intent that giving this money to the non-profit openAI was going to benefit people with open access to AI systems. Sam Altman has completely thrown out any semblance of law and how non-profits work and closed down the companies whitepapers(GPT papers after 2019 no longer published) and embedded it into Microsoft. This should be a slamdunk legal ruling against this ever happening again.

russdill 3y ago

Ok, but that sounds like something that requires a change in legislation. Suing companies for doing something permissible under the current legal structure just doesn't make sense.

y1426i 3y ago

I think this is a different case. The purpose of OpenAI could not have been achieved had it not been converted to a for-profit organization. Profits are necessary since they incentivize the innovation that AI calls for. Non-profits can never achieve these. Today we all benefit from OpenAI, but its the for-profit Open AI that made it possible. How else would they spend billions on compute and take those large risks, on whose money?