3 ms·

That was the point musk was complaining about. In practice it’s doable though. You can just create a new legal entity and move stuff and/or do future value cre

by Havoc 2y ago

That was the point musk was complaining about. In practice it’s doable though. You can just create a new legal entity and move stuff and/or do future value creating activity in the new co. IF everyone is on board with the plan on both sides of the move then that’s totally doable with enough lawyers and accountants

0xDEAFBEAD 2y ago
ICYMI, Elon Musk restarted his lawsuit a month or two ago: https://www.reuters.com/technology/elon-musk-revives-lawsuit-against-sam-altman-openai-nyt-reports-2024-08-05/ https://www.reuters.com/technology/elon-musk-revives-lawsuit... I'm wondering if OpenAI's charter might provide a useful legal angle. The charter states: >OpenAI’s mission is to ensure that [AGI ...] benefits all of humanity. >... >We commit to use any influence we obtain over AGI’s deployment to ensure it is used for the benefit of all, and to avoid enabling uses of AI or AGI that harm humanity or unduly concentrate power. >Our primary fiduciary duty is to humanity. We anticipate needing to marshal substantial resources to fulfill our mission, but will always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit. >... >We are committed to doing the research required to make AGI safe, and to driving the broad adoption of such research across the AI community. >We are concerned about late-stage AGI development becoming a competitive race without time for adequate safety precautions. [...] >... https://openai.com/charter/ https://openai.com/charter/ I'm no expert here, but to me, this charter doesn't appear to characterize OpenAI's behavior as of the year 2024. Safety people have left, Sam has inexplicably stopped discussing risks, and OpenAI seems to be focused on racing with competitors. My question: Is the charter legally enforceable? And if so, could it make sense for someone to file an additional lawsuit? Or shall we just wait and see how the Musk lawsuit plays out, for now?
- mminer237 2y ago
  It would think it is legally enforceable, but I suspect Kathy Jennings is the only person who has standing to sue over it.
  - 0xDEAFBEAD 2y ago
    So perhaps we can start a campaign of writing letters to her? I'm curious about the "fiduciary duty" part. As a member of humanity, it would appear that OpenAI has a fiduciary duty to me. Does that give me standing? Suppose I say that OpenAI compromises my safety (and thus finances) by failing to discuss risks, having a poor safety culture (as illustrated by employee exits), and racing. Would that fly?
    - mminer237 2y ago
      Under Lujan v. Defenders of Wildlife, you have to suffer a concrete, discernible injury. They can have broken their promise to you, but unless you can prove the dollar amount that harmed you, you can't sue. Even if you donated to them, all states I know of assign sole oversight for proper management of those funds to the state AG. If you donate to a food bank and they use the money to buy personal Ferraris instead of helping the hungry, that's clearly illegal, but you'd be out the money either way, so you wouldn't have standing to sue. The attorney general has to sue for mismanagement of funds. If you feel OpenAI is violating their charter, I would definitely encourage writing to Mrs. Jennings to voice that opinion.
  - pclmulqdq 2y ago
    Elon Musk absolutely has standing, as one of the biggest donors to the nonprofit. I assume he will settle for some ownership in the for-profit, though.
    - melodyogonna 2y ago
      Didn't he already refuse the shares offered to him?
      - pclmulqdq 2y ago
        I'm sure they just didn't offer him enough shares.
    - mminer237 2y ago
- whamlastxmas 2y ago
  Sam had a blog post literally two days ago that acknowledged risks. There’s also still a sizeable focus on safety and people with roles dedicated to it at open ai
  - johnsimer 2y ago
    Is there a sizable focus on safety? Last time I heard there was only like one safety person left on the team
  - deleted 2y ago
    [deleted]
- anigbrowl 2y ago
  LOL, it's like a bank with stained glass windows to make passers-by think it's a church, isn't it.
mminer237 2y ago
If the non-profit is on board with that though, then they're breaking the law. The IRS should reclassify them as a for-profit for private inurement and the attorney general should have the entire board removed and replaced.
- deleted 2y ago
  [deleted]
- throwup238 2y ago
  OpenAI Global, LLC - the entity that actually employs all the engineers, makes revenue from ChatGPT and the API, and pays taxes - has been a for-profit corporation since at least 2019: https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_non-profit https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_n... The IRS isn’t stupid. The rules on what counts as taxable income and what the nonprofit can take tax-free have been around for decades.
  - xpe 2y ago
    Whatever you think of the IRS, they aren't the master of their own destiny: https://www.propublica.org/article/how-the-irs-was-gutted https://www.propublica.org/article/how-the-irs-was-gutted (2018) > An eight-year campaign to slash the agency’s budget has left it understaffed, hamstrung and operating with archaic equipment. The result: billions less to fund the government. That’s good news for corporations and the wealthy.
  - mminer237 2y ago
    Still, if the non-profit has private inurement, the non-profit shouldn't be able to take anything tax-free as it wouldn't qualify as a 501(c)(3). The bigger issue is definitely Delaware non-profit law though.
duchenne 2y ago
But, if the non-profit gives all its assets to the new legal entity, shouldn't the new legal entity be taxed heavily? The gift tax rate goes up to 40% in the US. And 40% of the value of openAI is huge.
- SkyPuncher 2y ago
  You don't need to sell/give the assets away to allow the for-profit to use them. You sign an exclusive, non-revocable licensing agreement. Ownership of the original IP remains 100% with the original startup. Now, this only works if the non-profit's board is on-board.
- baking 2y ago
  A non-profit can't give away its assets to a private entity, but it can exchange its assets for fair value, in this case, equity in the for-profit.
crystal_revenge 2y ago
> That was the point musk was complaining about. I think the real issue Musk was complaining about is that sama is quickly becoming very wealthy and powerful and Musk doesn't want any competition in this space. Hopefully some people watching all this realize that the people running many of these big AI related projects don't care about AI. Sam Altman is selling a dream about AGI to help make himself both wealthier and more powerful, Elon Musk is doing the same with electric cars or better AI. People on HN are sincerely invested in the ideas behind these things, but it's important to recognize that the people pulling the strings largely don't care outside how it benefits them. Just one of the many reasons, at least in AI, truly open source efforts are essential for any real progress in the long run.
- squidsoup 2y ago
  The notion that consciousness is going to emerge in a system where neurons are modelled as bits is laughable.
  - steveoscaro 2y ago
    The famous last word of humanity before skynet wakes up (most joking, but only mostly)

by Havoc 2y ago

0xDEAFBEAD 2y ago

ICYMI, Elon Musk restarted his lawsuit a month or two ago: https://www.reuters.com/technology/elon-musk-revives-lawsuit-against-sam-altman-openai-nyt-reports-2024-08-05/ https://www.reuters.com/technology/elon-musk-revives-lawsuit... I'm wondering if OpenAI's charter might provide a useful legal angle. The charter states: >OpenAI’s mission is to ensure that [AGI ...] benefits all of humanity. >... >We commit to use any influence we obtain over AGI’s deployment to ensure it is used for the benefit of all, and to avoid enabling uses of AI or AGI that harm humanity or unduly concentrate power. >Our primary fiduciary duty is to humanity. We anticipate needing to marshal substantial resources to fulfill our mission, but will always diligently act to minimize conflicts of interest among our employees and stakeholders that could compromise broad benefit. >... >We are committed to doing the research required to make AGI safe, and to driving the broad adoption of such research across the AI community. >We are concerned about late-stage AGI development becoming a competitive race without time for adequate safety precautions. [...] >... https://openai.com/charter/ https://openai.com/charter/ I'm no expert here, but to me, this charter doesn't appear to characterize OpenAI's behavior as of the year 2024. Safety people have left, Sam has inexplicably stopped discussing risks, and OpenAI seems to be focused on racing with competitors. My question: Is the charter legally enforceable? And if so, could it make sense for someone to file an additional lawsuit? Or shall we just wait and see how the Musk lawsuit plays out, for now?

mminer237 2y ago
It would think it is legally enforceable, but I suspect Kathy Jennings is the only person who has standing to sue over it.
- 0xDEAFBEAD 2y ago
  So perhaps we can start a campaign of writing letters to her? I'm curious about the "fiduciary duty" part. As a member of humanity, it would appear that OpenAI has a fiduciary duty to me. Does that give me standing? Suppose I say that OpenAI compromises my safety (and thus finances) by failing to discuss risks, having a poor safety culture (as illustrated by employee exits), and racing. Would that fly?
  - mminer237 2y ago
    Under Lujan v. Defenders of Wildlife, you have to suffer a concrete, discernible injury. They can have broken their promise to you, but unless you can prove the dollar amount that harmed you, you can't sue. Even if you donated to them, all states I know of assign sole oversight for proper management of those funds to the state AG. If you donate to a food bank and they use the money to buy personal Ferraris instead of helping the hungry, that's clearly illegal, but you'd be out the money either way, so you wouldn't have standing to sue. The attorney general has to sue for mismanagement of funds. If you feel OpenAI is violating their charter, I would definitely encourage writing to Mrs. Jennings to voice that opinion.
- pclmulqdq 2y ago
  Elon Musk absolutely has standing, as one of the biggest donors to the nonprofit. I assume he will settle for some ownership in the for-profit, though.
  - melodyogonna 2y ago
    Didn't he already refuse the shares offered to him?
    - pclmulqdq 2y ago
      I'm sure they just didn't offer him enough shares.
  - mminer237 2y ago
whamlastxmas 2y ago
Sam had a blog post literally two days ago that acknowledged risks. There’s also still a sizeable focus on safety and people with roles dedicated to it at open ai
- johnsimer 2y ago
  Is there a sizable focus on safety? Last time I heard there was only like one safety person left on the team
- deleted 2y ago
  [deleted]
anigbrowl 2y ago
LOL, it's like a bank with stained glass windows to make passers-by think it's a church, isn't it.

mminer237 2y ago

If the non-profit is on board with that though, then they're breaking the law. The IRS should reclassify them as a for-profit for private inurement and the attorney general should have the entire board removed and replaced.

deleted 2y ago
[deleted]
throwup238 2y ago
OpenAI Global, LLC - the entity that actually employs all the engineers, makes revenue from ChatGPT and the API, and pays taxes - has been a for-profit corporation since at least 2019: https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_non-profit https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_n... The IRS isn’t stupid. The rules on what counts as taxable income and what the nonprofit can take tax-free have been around for decades.
- xpe 2y ago
  Whatever you think of the IRS, they aren't the master of their own destiny: https://www.propublica.org/article/how-the-irs-was-gutted https://www.propublica.org/article/how-the-irs-was-gutted (2018) > An eight-year campaign to slash the agency’s budget has left it understaffed, hamstrung and operating with archaic equipment. The result: billions less to fund the government. That’s good news for corporations and the wealthy.
- mminer237 2y ago
  Still, if the non-profit has private inurement, the non-profit shouldn't be able to take anything tax-free as it wouldn't qualify as a 501(c)(3). The bigger issue is definitely Delaware non-profit law though.

duchenne 2y ago

But, if the non-profit gives all its assets to the new legal entity, shouldn't the new legal entity be taxed heavily? The gift tax rate goes up to 40% in the US. And 40% of the value of openAI is huge.

SkyPuncher 2y ago
You don't need to sell/give the assets away to allow the for-profit to use them. You sign an exclusive, non-revocable licensing agreement. Ownership of the original IP remains 100% with the original startup. Now, this only works if the non-profit's board is on-board.
baking 2y ago
A non-profit can't give away its assets to a private entity, but it can exchange its assets for fair value, in this case, equity in the for-profit.

crystal_revenge 2y ago

> That was the point musk was complaining about. I think the real issue Musk was complaining about is that sama is quickly becoming very wealthy and powerful and Musk doesn't want any competition in this space. Hopefully some people watching all this realize that the people running many of these big AI related projects don't care about AI. Sam Altman is selling a dream about AGI to help make himself both wealthier and more powerful, Elon Musk is doing the same with electric cars or better AI. People on HN are sincerely invested in the ideas behind these things, but it's important to recognize that the people pulling the strings largely don't care outside how it benefits them. Just one of the many reasons, at least in AI, truly open source efforts are essential for any real progress in the long run.

squidsoup 2y ago
The notion that consciousness is going to emerge in a system where neurons are modelled as bits is laughable.
- steveoscaro 2y ago
  The famous last word of humanity before skynet wakes up (most joking, but only mostly)