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There's a rather simple reason why this is believable: as a board member of OpenAI Inc (the non profit), he is a disqualified person under self dealing rules [1

There's a rather simple reason why this is believable: as a board member of OpenAI Inc (the non profit), he is a disqualified person under self dealing rules [1][2]. If he actually gave himself a multi-billion dollar stake in the for-profit OpenAI Global LLC, it'd be the biggest self-dealing investigation in the history of nonprofits. The IRS and CA FTB would come down hard and OpenAI & Sam would spend a year+ dealing with the fallout. [1] https://www.irs.gov/charities-non-profits/private-foundations/private-foundations-indirect-self-dealing https://www.irs.gov/charities-non-profits/private-foundation... [2] https://www.irs.gov/charities-non-profits/private-foundations/acts-of-self-dealing-by-private-foundation https://www.irs.gov/charities-non-profits/private-foundation...

JumpCrisscross 2y ago
OpenAI needs money. To do that it must promise to incorporate. It cannot incorporate and then raise funds, because that would take time and give the non-profit blocking leverage. So Altman must raise money while giving a promise, no promise, because the company and non-profit are at arms length. That said, this is a public announcement. There is motivation more than legal for making this a public concern.
- throwup238 2y ago
  Can you explain what you mean? I'm not quite sure I follow. > OpenAI needs to raise funds and incorporate. Which OpenAI are we talking about? Non-profit or its for profit subsidiaries? They're all named OpenAI Inc, OpenAI Global LLC, OpenAI LLC, etc. The for-profit is already incorporated (since 2019 [1]), it just needs to be restructured before anyone is willing to put any more money in at crazy 12 figure valuations. AFAIK that means removing board control from the nonprofit to prevent another fiasco, converting Microsoft's deal to stock to undo the profit share cap thing, and create an employee stock pool to retain talent. > Because the company and non-profit are at arms length. I'm not so sure that they are (that said, I don't understand your overall point so this is probably a nitpick). The subsidiary definitely isn't a passive investment as far as UBIT is concerned, and I don't think they can ever be considered arms length if Altman is both CEO of the for-profit and on the board of the non-profit (as far as the corporate veil goes). > There is motivation more than legal for making this a public concern. It definitely feels like a trial balloon. [1] https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_non-profit https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_n...
lolinder 2y ago
Isn't this as simple as him just stepping down from the board? He already gutted it and replaced the members with his own supporters, he doesn't actually need to be on it anymore when it stops being useful.

JumpCrisscross 2y ago

OpenAI needs money. To do that it must promise to incorporate. It cannot incorporate and then raise funds, because that would take time and give the non-profit blocking leverage. So Altman must raise money while giving a promise, no promise, because the company and non-profit are at arms length. That said, this is a public announcement. There is motivation more than legal for making this a public concern.

throwup238 2y ago
Can you explain what you mean? I'm not quite sure I follow. > OpenAI needs to raise funds and incorporate. Which OpenAI are we talking about? Non-profit or its for profit subsidiaries? They're all named OpenAI Inc, OpenAI Global LLC, OpenAI LLC, etc. The for-profit is already incorporated (since 2019 [1]), it just needs to be restructured before anyone is willing to put any more money in at crazy 12 figure valuations. AFAIK that means removing board control from the nonprofit to prevent another fiasco, converting Microsoft's deal to stock to undo the profit share cap thing, and create an employee stock pool to retain talent. > Because the company and non-profit are at arms length. I'm not so sure that they are (that said, I don't understand your overall point so this is probably a nitpick). The subsidiary definitely isn't a passive investment as far as UBIT is concerned, and I don't think they can ever be considered arms length if Altman is both CEO of the for-profit and on the board of the non-profit (as far as the corporate veil goes). > There is motivation more than legal for making this a public concern. It definitely feels like a trial balloon. [1] https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_non-profit https://en.wikipedia.org/wiki/OpenAI#2019:_Transition_from_n...

lolinder 2y ago

Isn't this as simple as him just stepping down from the board? He already gutted it and replaced the members with his own supporters, he doesn't actually need to be on it anymore when it stops being useful.