[quickthrowman]

You have it backwards, the not for profit entity owns the for profit entity. From Wikipedia:

> OpenAI is an American artificial intelligence (AI) organization consisting of the non-profit OpenAI, Inc.[4] registered in Delaware and its for-profit subsidiary corporation OpenAI Global, LLC.[5]

IKEA [0] and Rolex [1] are structured in a similar manner, although different since they’re not US based.

[0] https://en.m.wikipedia.org/wiki/Stichting_INGKA_Foundation

[1] https://en.m.wikipedia.org/wiki/Hans_Wilsdorf#Hans_Wilsdorf_...

[goodluckchuck]

What’s the point of the subsidiary?

Nonprofits can already raise funds by e.g. selling T-Shirts, baked goods, ai services, etc…

[next_xibalba]

It is hard to attract multi-billion dollar investments and attract elite AI talent when competing with for-profits. This was the stated reason and makes a lot of sense. The comp packages for elite AI talent is now claimed to be in the range of $10M.

[jltsiren]

To maintain a clear separation between for-profit and non-profit activities. If a non-profit operates in a market with for-profit competitors, tax authorities may start considering it a for-profit organization, making all of its income taxable.

And maybe to allow choosing the right people for the right job. If the non-profit has an ideological purpose, its leadership should probably reflect that. At the same time, the for-profit subsidiary probably works better under professional management.

[wmf]

If a nonprofit has mostly revenue and few donations (Mozilla) the IRS revokes their tax exemption. OpenAI could not have done the Microsoft deal as a nonprofit.

[dragonwriter]

> What’s the point of the subsidiary

Closing the huge fundraising gap OpenAI had as a nonprofit by returning profits from commercial efforts instrumental to, but distinct from, the nonprofits charitable purpose, without sacrififing any governance or control of the subordinate entity.

[blackoil]

Lol, 10 billion dollars of cookies and t-shirts. They'll have to be bigger than Nestle and Zara. To sell AI services, they need to build it and for that they need the money.

[Sosh101]

Sounds perverse somehow.

[bastawhiz]

It's literally the exact corporate structure of Mozilla.

[sho_hn]

And Bosch, more or less:

> Robert Bosch GmbH, including its wholly owned subsidiaries, is unusual in that it is an extremely large, privately owned corporation that is almost entirely (92%) owned by a charitable foundation. Thus, while most of the profits are invested back into the corporation to build for the future and sustain growth, nearly all of the profits distributed to shareholders are devoted to humanitarian causes.

> [...] Bosch invests 9% of its revenue on research and development, nearly double the industry average of 4.7%.

(Source: Wikipedia)

I always considered this a wonderful idea for a tech giant.

[falserum]

Note: this structure is for tax purposes. In the spirit of “Own nothing, control everything”.

[gumby]

And IKEA

[CydeWeys]

Rolex too, believe it or not.

[jliptzin]

And OpenAI

[asmithmd1]

And Bose. MIT, the nonprofit owns 100% of the for profit company

[moralestapia]

Lol, is this supposed to be an argument in favor of that structure?

Have you read any news about Mozilla's budget in the past 10 years or so?

[Intralexical]

> Have you read any news about Mozilla's budget in the past 10 years or so?

Revenue/Expenses/Net Assets

2013: $314m/$295m/$255m

2018: $450m/$451m/$524m

2021: $600m/$340m/$1,054m

(Note: "2017 was an outlier, due in part to changes in the search revenue deal that was negotiated that year." 2019 was also much higher than both 2018 and 2020 for some reason.)

2018 to 2021 also saw their revenue from "Subscription and advertising revenue"— Representing their Pocket, New Tab, and VPN efforts to diversify away from dependence on Google— Increase by over 900%, from $5m to $57m.

https://foundation.mozilla.org/en/who-we-are/public-records/

Seriously, Mozilla gets shat on all the time, presumably because they're one of the few sources of hope and therefore disappointment in an overall increasingly problematic Internet landscape, and I wish they would be bigger too, but they're doing fine all things considered.

Certainly I wouldn't say their problems are due to this particular apsect of their legal structure.

[yownie]

>Seriously, Mozilla gets shat on all the time, presumably because they're one of the few sources of hope and therefore disappointment in an overall increasingly problematic Internet landscape, and I wish they would be bigger too, but they're doing fine all things considered.

I think they get shat on all the time because of what you mentioned but also because they consistently fail to deliver a good browser experience for most of their still loyal users.

Most of the people I talk to who still use their product do so out of allegiance to the values of FOSS despite the dog-shit products they keep foisting upon us. You'd think we'd wise up several decades in by now.

[numbsafari]

Sounds perverse somehow.

[belter]

Preverse it is: "IKEA’s 15 years of tax evasion and fraud via the Netherlands" - https://www.europarl.europa.eu/doceo/document/E-9-2021-00517...

[dev1ycan]

It is but that's capitalism, the alternative is to have what happens with most corporations where their majority shareholder is blackrock/vanguard etc, a basically souless investment conglomerate, whose majority shareholder is the other of blackrock/vanguard, etc. and then the 3rd biggest and then the fourth so on and so on.

You basically never have a person in the chain actually making decisions for anything but to maximize profit.