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They're IPOing a commercial subsidiary of OpenAI so that it can donate even more money to the parent nonprofit. (Actually the subsidiary is everything and the

by wmf 4mo ago

They're IPOing a commercial subsidiary of OpenAI so that it can donate even more money to the parent nonprofit. (Actually the subsidiary is everything and the nonprofit is a do-nothing fig leaf but the IRS and Congress seem to not care enough to stop them.)

Yizahi 4mo ago
Checks and balances dear sirs and madams, checks and balances. Excepts apparently it meant cheques used to top up account balances.
- deleted 4mo ago
  [deleted]
- nonethewiser 4mo ago
  Checks and balances concern constraints on government power. Whether OpenAI's structure complies with the law is a question of regulation, not checks and balances.
  - Yizahi 4mo ago
    It's not a question of regulation, but a question of enforcing said regulation and a question of enforcing a lawful process which follows a breach of a regulation. Which is exactly a spirit of the phrase "checks and balances". It means that if one branch breaks law, then the other branch enforces a compliance with laws/regulations. Of even inside the same branch, if a temporary elected doofus in charge is breaking the law, then people even lower in hierarchy will enforce normal branch functioning. Which in practice was super easy to break, sabotage and blackmail, so neither checking nor balancing happened, everyone went corrupt or impotent simultaneously.
Atreiden 4mo ago
But then private shareholders are able to extract shareholder value from the subsidiary, so the "nonprofit" component is utterly meaningless here. How is this not illegal? What prevents any nonprofit from doing this to sidestep its filing status and extract profit?
- bwhiting2356 4mo ago
  not to be a shill, but isn't it good for the non-profit to own a big piece of a successful company?
  - swores 4mo ago
    I think it depends on context. If the private subsidiary was doing semi-unrelated stuff to the goals of the non-profit, and using it to fund the non-profit, then your logic could make sense - for example if a cancer research charity owned a profitable business and funnelled the profits up to spend on research, great. But in OpenAI's case, the claimed goals of the non-profit were essentially "do AI in a way that puts safety above profits". And whether or not one agrees with their previous approach to safety, or even whether safety needs to be cared about, it's undeniable that the for-profit business isn't acting as useful fundraising for the non-profit's goals, it's literally acting in the opposite direction.
    - JumpCrisscross 4mo ago
      > it's undeniable that the for-profit business isn't acting as useful fundraising for the non-profit's goals, it's literally acting in the opposite direction It's generally not up to your or to me, it's up to the donors to the non-profit. If what you find to be undeniable is very much deniable to them, then that is their right. The only question of public concern is whether OpenAI, Inc., a charity, meets the exemption requirements [1]. [1] https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations https://www.irs.gov/charities-non-profits/charitable-organiz...
- yieldcrv 4mo ago
  A few things, but they work very well for our industry. The rule is that the nonprofit and disqualified persons (mostly board members), cant own businesses together, well they can but not more than 35% of it together, and a max of 20% can have voting capability The consequences arent immediate, non profits have 3 years to correct this Now in the tech industry, getting VCs involved is already the plan from day one and founders get diluted, so getting below 35% is either easy, or easy within 3 years so they’re fine there’s a lot of things they can all do to deal with the share consolidation
siren2026 4mo ago
Just the fact that they still calling themselves OpenAI is so grotesque. Similar to Google with "Don't be evil". At least they got the decency to eventually remove it when they realized they were actually doing evil.

by wmf 4mo ago

Yizahi 4mo ago

Checks and balances dear sirs and madams, checks and balances. Excepts apparently it meant cheques used to top up account balances.

deleted 4mo ago
[deleted]
nonethewiser 4mo ago
Checks and balances concern constraints on government power. Whether OpenAI's structure complies with the law is a question of regulation, not checks and balances.
- Yizahi 4mo ago
  It's not a question of regulation, but a question of enforcing said regulation and a question of enforcing a lawful process which follows a breach of a regulation. Which is exactly a spirit of the phrase "checks and balances". It means that if one branch breaks law, then the other branch enforces a compliance with laws/regulations. Of even inside the same branch, if a temporary elected doofus in charge is breaking the law, then people even lower in hierarchy will enforce normal branch functioning. Which in practice was super easy to break, sabotage and blackmail, so neither checking nor balancing happened, everyone went corrupt or impotent simultaneously.

Atreiden 4mo ago

But then private shareholders are able to extract shareholder value from the subsidiary, so the "nonprofit" component is utterly meaningless here. How is this not illegal? What prevents any nonprofit from doing this to sidestep its filing status and extract profit?

bwhiting2356 4mo ago
not to be a shill, but isn't it good for the non-profit to own a big piece of a successful company?
- swores 4mo ago
  I think it depends on context. If the private subsidiary was doing semi-unrelated stuff to the goals of the non-profit, and using it to fund the non-profit, then your logic could make sense - for example if a cancer research charity owned a profitable business and funnelled the profits up to spend on research, great. But in OpenAI's case, the claimed goals of the non-profit were essentially "do AI in a way that puts safety above profits". And whether or not one agrees with their previous approach to safety, or even whether safety needs to be cared about, it's undeniable that the for-profit business isn't acting as useful fundraising for the non-profit's goals, it's literally acting in the opposite direction.
  - JumpCrisscross 4mo ago
    > it's undeniable that the for-profit business isn't acting as useful fundraising for the non-profit's goals, it's literally acting in the opposite direction It's generally not up to your or to me, it's up to the donors to the non-profit. If what you find to be undeniable is very much deniable to them, then that is their right. The only question of public concern is whether OpenAI, Inc., a charity, meets the exemption requirements [1]. [1] https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations https://www.irs.gov/charities-non-profits/charitable-organiz...
yieldcrv 4mo ago
A few things, but they work very well for our industry. The rule is that the nonprofit and disqualified persons (mostly board members), cant own businesses together, well they can but not more than 35% of it together, and a max of 20% can have voting capability The consequences arent immediate, non profits have 3 years to correct this Now in the tech industry, getting VCs involved is already the plan from day one and founders get diluted, so getting below 35% is either easy, or easy within 3 years so they’re fine there’s a lot of things they can all do to deal with the share consolidation

siren2026 4mo ago

Just the fact that they still calling themselves OpenAI is so grotesque. Similar to Google with "Don't be evil". At least they got the decency to eventually remove it when they realized they were actually doing evil.