7 ms·

I don't understand why they are spending so much time and effort trying to put a positive spin on this whole for-profit thing. No one is buying it. We all know

by paxys 2y ago

I don't understand why they are spending so much time and effort trying to put a positive spin on this whole for-profit thing. No one is buying it. We all know what's going on. Just say "we want to make lots of money" and move on with your lives.

sirspacey 2y ago
Because that is not their motivation and no amount of spin casting changes it. There’s a simple counter-factual for people with this level of ability: “Making money” can be easily pursued at BlackRock or any number of PE firms. Creating historic technology, of unknown difficulty and scale of impact, is not something pure capitalism can or is designed to deliver. What would investors or customers buy at the start of OpenAI? While OpenAI may end up a corporation like any other, it would not have achieved what it had as one.
jefftk 2y ago
"We are turning our non profit into a for profit because we want to make money" isn't legal. To make this transition in a way that maximizes how much money they can make while minimizing what they lose to lawsuits they need to explain what they're doing in a positive way.
- nicce 2y ago
  If everyone sees it through, does anything else that direct evidence of actions prove otherwise? Explaining just wastes everyone's time.
  - jefftk 2y ago
    They are explaining how they see what they are doing as compliant with the law around 501c3s, which it arguably is. And they are putting a positive spin on it to make it less likely to be challenged, since the main ways this could be challenged involve government agencies and not suits from individuals.
  - vouaobrasil 2y ago
    No matter how obvious a facade is though, there is probably a sizable group that doesn't see through it.
- franga2000 2y ago
  Is it illegal? If it is, not amount of explaining will make it legal.
  - moron4hire 2y ago
    When the consequence is paying a fine/settlement, it means the law is only for poor people.
  - mikeyouse 2y ago
    That's not really true and is at the heart of much of the 'confusion' about e.g. tax evasion vs. tax avoidance. You can do illegal things if you don't get prosecuted for them and a lot of this type of legal wrangling is to give your lawyers and political allies enough grey area to grab onto to shout about selective prosecution when you're called out for it.
    - Drew_ 2y ago
      I don't see how that's relevant. In what case is the difference between tax evasion and avoidance just the motive/explanation? I'm pretty sure the difference is purely technical. Moreover, I don't think a lack of prosecution/enforcement makes something legal. At least, I don't think that defense would hold up very well in court.
      - mikeyouse 2y ago
        > I'm pretty sure the difference is purely technical. It's really not - there is a ton of tax law that relies on e.g. the fair market value of hard-to-price assets or if all else fails and a penalty is due, there's an entire section of the CFR on how circumstances surrounding the underpayment can reduce or eliminate the liability. https://www.law.cornell.edu/cfr/text/26/1.6664-4 https://www.law.cornell.edu/cfr/text/26/1.6664-4 If you've only ever filed a personal tax return, you're dramatically under-appreciating how complicated business taxes are and how much grey area there really is. Did you know you can pay your 10-year old to work for you as a means to avoid taxes? Try looking up the dollar amount where avoid turns to evade... there isn't one. The amount paid just has to be "reasonable and justifiable" and the work they perform has to be "work necessary to the business".
- mapt 2y ago
  I don't think it should really matter how they explain it, legally.
  - Closi 2y ago
    That depends - they probably have to do whatever is in the best interests of the non-profit, so if they explain the motivations behind why they feel they are acting within their responsibility then that could probably help a defence. IANAL though. I assume you can make a case though that says OpenAI needs to be able to raise sufficient capital to maintain its current market position, and these changes are required for that, and without maintaining market position the non-profit arm will not be able to achieve its aims. As they have to act in the interests of the non-profit arm, I assume there must be an element of mens rea (state of mind) - the same action could probably be illegal or legal depending on why it was done.
- Seattle3503 2y ago
  > "We are turning our non profit into a for profit because we want to make money" isn't legal. Source? The NFL did this because they were already making a lot of money. As I understand it, the tax laws practically required the change.
  - jefftk 2y ago
    The NFL was a 501c6 trade association, not a 501c3 though?
    - Seattle3503 2y ago
      Ah interesting. How are those different?
      - jefftk 2y ago
        The key thing is that assets of a 501c3 are irrevocably dedicated to charitable purposes, which is not the case for a 501c6. If the NFL had somehow started as a 501c3 before realizing that was a bad structure for their work, the standard approach would be for the 501c3 to sell their assets at fair market value to new for-profit. Then either those proceeds could be donated to other 501c3s, or the old NFL could continue as a foundation, applying those assets charitably. (Not a lawyer, just someone interested in non-profits. I'm on the board of two, but that doesn't make me an expert in regulation!)
        Seattle3503 2y ago
        Interesting, TIL. That is the basis for why the conversion is illegal?
        jefftk 2y ago
        Sorry, which conversion? If you mean OpenAI, it's not clear that what they are currently planning is illegal. If they do it correctly, the non-profit is fully compensated for their stake in the for-profit.
Kinrany 2y ago
This is pure speculation but being a nonprofit, there's still a risk of getting sued by the public on the grounds of not following the promises of their work being a public good.
- rvnx 2y ago
  Well it has several tax advantages, and nobody really knows how the GPUs are actually used. Let's imagine some of these AI companies are actually mining cryptos for the benefits of their owners or their engineers, who would know ?
chis 2y ago
I think often company spin like this is more targeted towards internal employees than the outside world. Employees on the inside are always going to have a decent percentage of “true believers” who have cognitive dissonance if they don’t believe they’re making the world better. And so companies need to provide a narrative to keep that type of employee happy.
- voidfunc 2y ago
  This. Stuff like mission statements and that kind of crap is for these type of employees who need to delude themselves that they're not just part of a profit making exercise or manufacturing weapons to suppress minorities / kill brown people. Every company has one.
  - DSingularity 2y ago
    I feel that Gaza has shown us that there aren’t as many of these types of employees as we think. Most people don’t care. OpenAI is doing this show because if they don’t they are more vulnerable to law-suits. They need to manufacture a narrative without this exact structure they cannot fulfill their original mission.
    - zombiwoof 2y ago
      Agreed. The question every employee cares about is “will this make my RSU go up”
  - benterix 2y ago
    Really? I mean, I don't know a single person in real life who believes all this corporate bs. We know there must be a mission because this is the current business culture taught during MBA courses and everybody accepted it as a matter of course but I'm not even sure the CEOs themselves believe there is even one employee who is fascinated by its mission - say, a FedEx driver who admires the slogan "FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related business services".
- 2y ago
raincole 2y ago
> they are spending so much time and effort trying Do they? It reads like a very average PR piece that an average PR person can write.
- kevinventullo 2y ago
  In fact I think it’d be a bit sad if it wasn’t largely written by ChatGPT.
alexalx666 2y ago
exactly, this would be even more relatable to most of people, we are not living in Star Track where you don't have to make money to survive.
dylan604 2y ago
> We all know what's going on I've been looking for my broadbrush. I forgot I loaned it out. It seems we've yet again forgotten that HN is an echo chamber. Just because the audience here "knows" something does not mean the rest of the vastly greater numbers of people do as well. In fact, so many people I've talked with don't have a clue about who makes/owns/controls ChatGPT nor would they recognize Sam's name if even OpenAI. The PR campaign being waged is not meant for this audience. It is meant for everyone else that can be influenced.
DidYaWipe 2y ago
And take the fraudulent "open" out of their name. That douchebaggery sets a precedent that will no doubt run rampant.
j45 2y ago
My understanding was the non-profit would own a for-profit, but this seems to be going the other way to have a for-profit to own a non-profit?
- singron 2y ago
  You can't own a non-profit. It doesn't have shares or shareholders. The article says they want the non-profit to own shares of the PBC.
  - j45 2y ago
    The OpenAI announcements seems to lay out a much different separation of operations moving forward: "Under the proposed structure, the public benefit corporation, which is a for-profit corporate entity, will run and control OpenAI’s operations and business, while the non-profit will hire a leadership team and staff for charitable initiatives in sectors such as healthcare, education and science." https://www.theguardian.com/technology/2024/dec/27/openai-plan-for-profit-structure https://www.theguardian.com/technology/2024/dec/27/openai-pl... The non-profit would be relegated to work off to the side to make it's impact in the world, where the new for-profit corporate entity will just focus on profit.
fullshark 2y ago
No one breaks kayfabe
ksec 2y ago
>We all know what's going on. I am not entirely sure about this. Before 2012, may be. Somewhere along the line 2012 - 2022 it was all about doing something Good for the world. And "we want to make lots of money" isn't part of that equation. Now the pendulum may be swinging back but it only just started. Nice point of reference may be Sequoia profile of Sam Bankman-Fried.
hackitup7 2y ago
I couldn't care less about their structure but the level of effort to put a positive spin on it makes the whole thing look more sketchy rather than less.
TheRealNGenius 2y ago
[dead]
sungho_ 2y ago
Sam Altman and OpenAI aim to become the gods of a new world. Compared to that goal, it makes sense that money feels trivial to them.
atleastoptimal 2y ago
I’m not sure it’s always the best move for an organization to cater exclusively to their most cynical critics.
moralestapia 2y ago
It's not for you (or me, or us), it's for the upcoming lawsuit.
ilyagr 2y ago
They are trying to convince themselves that is not the reason, because they'd like to think of themselves as above such trivial concerns as greed, and hunger for power, and fear of somebody else beating them to it and having power over them. So, they want to call their feelings as something else, something noble. And then, as others point out, they are also interested in other people believing this, whether for employees or lawsuits. But I think that would not justify saying these same things again and again, when by now they have nothing new to say and people have mostly made up their mind.
sneak 2y ago
I don’t think that’s what’s going on. I don’t think sama is motivated much by money.

by paxys 2y ago

sirspacey 2y ago

Because that is not their motivation and no amount of spin casting changes it. There’s a simple counter-factual for people with this level of ability: “Making money” can be easily pursued at BlackRock or any number of PE firms. Creating historic technology, of unknown difficulty and scale of impact, is not something pure capitalism can or is designed to deliver. What would investors or customers buy at the start of OpenAI? While OpenAI may end up a corporation like any other, it would not have achieved what it had as one.

jefftk 2y ago

"We are turning our non profit into a for profit because we want to make money" isn't legal. To make this transition in a way that maximizes how much money they can make while minimizing what they lose to lawsuits they need to explain what they're doing in a positive way.

nicce 2y ago
If everyone sees it through, does anything else that direct evidence of actions prove otherwise? Explaining just wastes everyone's time.
- jefftk 2y ago
  They are explaining how they see what they are doing as compliant with the law around 501c3s, which it arguably is. And they are putting a positive spin on it to make it less likely to be challenged, since the main ways this could be challenged involve government agencies and not suits from individuals.
- vouaobrasil 2y ago
  No matter how obvious a facade is though, there is probably a sizable group that doesn't see through it.
franga2000 2y ago
Is it illegal? If it is, not amount of explaining will make it legal.
- moron4hire 2y ago
  When the consequence is paying a fine/settlement, it means the law is only for poor people.
- mikeyouse 2y ago
  That's not really true and is at the heart of much of the 'confusion' about e.g. tax evasion vs. tax avoidance. You can do illegal things if you don't get prosecuted for them and a lot of this type of legal wrangling is to give your lawyers and political allies enough grey area to grab onto to shout about selective prosecution when you're called out for it.
  - Drew_ 2y ago
    I don't see how that's relevant. In what case is the difference between tax evasion and avoidance just the motive/explanation? I'm pretty sure the difference is purely technical. Moreover, I don't think a lack of prosecution/enforcement makes something legal. At least, I don't think that defense would hold up very well in court.
    - mikeyouse 2y ago
      > I'm pretty sure the difference is purely technical. It's really not - there is a ton of tax law that relies on e.g. the fair market value of hard-to-price assets or if all else fails and a penalty is due, there's an entire section of the CFR on how circumstances surrounding the underpayment can reduce or eliminate the liability. https://www.law.cornell.edu/cfr/text/26/1.6664-4 https://www.law.cornell.edu/cfr/text/26/1.6664-4 If you've only ever filed a personal tax return, you're dramatically under-appreciating how complicated business taxes are and how much grey area there really is. Did you know you can pay your 10-year old to work for you as a means to avoid taxes? Try looking up the dollar amount where avoid turns to evade... there isn't one. The amount paid just has to be "reasonable and justifiable" and the work they perform has to be "work necessary to the business".
mapt 2y ago
I don't think it should really matter how they explain it, legally.
- Closi 2y ago
  That depends - they probably have to do whatever is in the best interests of the non-profit, so if they explain the motivations behind why they feel they are acting within their responsibility then that could probably help a defence. IANAL though. I assume you can make a case though that says OpenAI needs to be able to raise sufficient capital to maintain its current market position, and these changes are required for that, and without maintaining market position the non-profit arm will not be able to achieve its aims. As they have to act in the interests of the non-profit arm, I assume there must be an element of mens rea (state of mind) - the same action could probably be illegal or legal depending on why it was done.
Seattle3503 2y ago
> "We are turning our non profit into a for profit because we want to make money" isn't legal. Source? The NFL did this because they were already making a lot of money. As I understand it, the tax laws practically required the change.
- jefftk 2y ago
  The NFL was a 501c6 trade association, not a 501c3 though?
  - Seattle3503 2y ago
    Ah interesting. How are those different?
    - jefftk 2y ago
      The key thing is that assets of a 501c3 are irrevocably dedicated to charitable purposes, which is not the case for a 501c6. If the NFL had somehow started as a 501c3 before realizing that was a bad structure for their work, the standard approach would be for the 501c3 to sell their assets at fair market value to new for-profit. Then either those proceeds could be donated to other 501c3s, or the old NFL could continue as a foundation, applying those assets charitably. (Not a lawyer, just someone interested in non-profits. I'm on the board of two, but that doesn't make me an expert in regulation!)
      - Seattle3503 2y ago
        Interesting, TIL. That is the basis for why the conversion is illegal?
        jefftk 2y ago
        Sorry, which conversion? If you mean OpenAI, it's not clear that what they are currently planning is illegal. If they do it correctly, the non-profit is fully compensated for their stake in the for-profit.

Kinrany 2y ago

This is pure speculation but being a nonprofit, there's still a risk of getting sued by the public on the grounds of not following the promises of their work being a public good.

rvnx 2y ago
Well it has several tax advantages, and nobody really knows how the GPUs are actually used. Let's imagine some of these AI companies are actually mining cryptos for the benefits of their owners or their engineers, who would know ?

chis 2y ago

I think often company spin like this is more targeted towards internal employees than the outside world. Employees on the inside are always going to have a decent percentage of “true believers” who have cognitive dissonance if they don’t believe they’re making the world better. And so companies need to provide a narrative to keep that type of employee happy.

voidfunc 2y ago
This. Stuff like mission statements and that kind of crap is for these type of employees who need to delude themselves that they're not just part of a profit making exercise or manufacturing weapons to suppress minorities / kill brown people. Every company has one.
- DSingularity 2y ago
  I feel that Gaza has shown us that there aren’t as many of these types of employees as we think. Most people don’t care. OpenAI is doing this show because if they don’t they are more vulnerable to law-suits. They need to manufacture a narrative without this exact structure they cannot fulfill their original mission.
  - zombiwoof 2y ago
    Agreed. The question every employee cares about is “will this make my RSU go up”
- benterix 2y ago
  Really? I mean, I don't know a single person in real life who believes all this corporate bs. We know there must be a mission because this is the current business culture taught during MBA courses and everybody accepted it as a matter of course but I'm not even sure the CEOs themselves believe there is even one employee who is fascinated by its mission - say, a FedEx driver who admires the slogan "FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related business services".
2y ago

raincole 2y ago

> they are spending so much time and effort trying Do they? It reads like a very average PR piece that an average PR person can write.

kevinventullo 2y ago
In fact I think it’d be a bit sad if it wasn’t largely written by ChatGPT.

alexalx666 2y ago

exactly, this would be even more relatable to most of people, we are not living in Star Track where you don't have to make money to survive.

dylan604 2y ago

> We all know what's going on I've been looking for my broadbrush. I forgot I loaned it out. It seems we've yet again forgotten that HN is an echo chamber. Just because the audience here "knows" something does not mean the rest of the vastly greater numbers of people do as well. In fact, so many people I've talked with don't have a clue about who makes/owns/controls ChatGPT nor would they recognize Sam's name if even OpenAI. The PR campaign being waged is not meant for this audience. It is meant for everyone else that can be influenced.

DidYaWipe 2y ago

And take the fraudulent "open" out of their name. That douchebaggery sets a precedent that will no doubt run rampant.

j45 2y ago

My understanding was the non-profit would own a for-profit, but this seems to be going the other way to have a for-profit to own a non-profit?

singron 2y ago
You can't own a non-profit. It doesn't have shares or shareholders. The article says they want the non-profit to own shares of the PBC.
- j45 2y ago
  The OpenAI announcements seems to lay out a much different separation of operations moving forward: "Under the proposed structure, the public benefit corporation, which is a for-profit corporate entity, will run and control OpenAI’s operations and business, while the non-profit will hire a leadership team and staff for charitable initiatives in sectors such as healthcare, education and science." https://www.theguardian.com/technology/2024/dec/27/openai-plan-for-profit-structure https://www.theguardian.com/technology/2024/dec/27/openai-pl... The non-profit would be relegated to work off to the side to make it's impact in the world, where the new for-profit corporate entity will just focus on profit.

fullshark 2y ago

No one breaks kayfabe

ksec 2y ago

>We all know what's going on. I am not entirely sure about this. Before 2012, may be. Somewhere along the line 2012 - 2022 it was all about doing something Good for the world. And "we want to make lots of money" isn't part of that equation. Now the pendulum may be swinging back but it only just started. Nice point of reference may be Sequoia profile of Sam Bankman-Fried.

hackitup7 2y ago

I couldn't care less about their structure but the level of effort to put a positive spin on it makes the whole thing look more sketchy rather than less.

TheRealNGenius 2y ago

[dead]

sungho_ 2y ago

Sam Altman and OpenAI aim to become the gods of a new world. Compared to that goal, it makes sense that money feels trivial to them.

atleastoptimal 2y ago

I’m not sure it’s always the best move for an organization to cater exclusively to their most cynical critics.

moralestapia 2y ago

It's not for you (or me, or us), it's for the upcoming lawsuit.

ilyagr 2y ago

They are trying to convince themselves that is not the reason, because they'd like to think of themselves as above such trivial concerns as greed, and hunger for power, and fear of somebody else beating them to it and having power over them. So, they want to call their feelings as something else, something noble. And then, as others point out, they are also interested in other people believing this, whether for employees or lawsuits. But I think that would not justify saying these same things again and again, when by now they have nothing new to say and people have mostly made up their mind.

sneak 2y ago

I don’t think that’s what’s going on. I don’t think sama is motivated much by money.