[eightnoteight]

once it converts into profit-seeking venture, it won't get the tax benefits

one could argue that they did R&D as a non-profit and now converted to for-profit to avoid paying taxes, but until last year R&D already got tax benefits to even for-profit venture

so there really is no tax-advantage of converting a non-profit to for-profit

[andrewflnr]

But it keeps the intangible benefits it accrued by being ostensibly non-profit, and that can easily be worth the money paid in taxes.

Otherwise, why do you think OpenAI is doing it?

[eightnoteight]

> it keeps the intangible benefits it accrued by being ostensibly non-profit

but there would be no different to a for-profit entity right? i.e even for-profit entities get tax benefits if they convert their profits to intangibles

this is my thinking. Open AI non-profit gets donations, uses those donations to make a profit, converts this profit to intangibles to avoid paying taxes, and pumps these intangibles into the for-profit entity. based on your hypothesis open ai avoided taxes

but the same thing in a for-profit entity also avoids taxes, i.e for-profit entity uses investment to make a profit, converts this profit to intangibles to avoid paying taxes.

so I'm trying to understand how Open AI found a loop hole where if it went via the for-profit then it wouldn't have gotten the tax advantages it got from non-profit route

[andrewflnr]

Maybe we're using different definitions of "intangible", but if you can "convert" them to/from profits they're not intangible in my book. I'm thinking donated effort, people they recruited who wouldn't have signed up if then company was for-profit, mainly goodwill related stuff.

[whimsicalism]

this long period of OAI non-profit status when they were making no money and spending tons on capital expenditures would not be taxable anyways.

[whimsicalism]

What benefits? What taxes?

Honestly it does not sound like anyone here knows the first thing about non-profits.

OAI did it because they want to raise capital so they can fund more towards building agi.

[svnt]

The tax advantage still exists for the investors.

[eightnoteight]

I don't believe non-profits can have investors, only donors i.e an investor by definition expects money out of his investment which he can never get out of a non-profit

only the for-profit entity of the OpenAI can have investors, who don't get any tax advantage when they eventually want to cash out