[thatoneguy]

Right? How can a non-profit decide it's suddenly a for-profit. Aren't there rules about having to give assets to other non-profits in the event the non-profit is dissolved? Or can any startup just start as a non-profit and then decide it's a for-profit startup later?

[bragr]

Non-profits are allowed to own for profit entities and use the profits to fund their non-profit activities. It is a pretty common model used by many entities from Mozilla[1][2] to the National Geographic Society[3][4].

[1] https://en.wikipedia.org/wiki/Mozilla_Foundation

[2] https://en.wikipedia.org/wiki/Mozilla_Corporation

[3] https://en.wikipedia.org/wiki/National_Geographic_Society

[4] https://en.wikipedia.org/wiki/National_Geographic_Partners

[asadotzler]

This is misleading at best. There are rules you must follow to do this legally and OAI's structure violates some of them and is under scrutiny from the IRS so their new plan is for the non-profit to completely sell off the subsidiary and then die or go into "maintenance mode" with the new fully commercial subsidiary carrying the ball (and the team) forward to riches.

I considered things like this as an original Mozilla person back in the day. Mozilla could have sold the Firefox organization or the whole corporation for billions when it had 30% of the web, but that would have been a huge violation o of trust so it was never even on the table.

That so many here are fans of screwing the world over for a buck makes this kind of comment completely unsurprising.

[versteegen]

> That so many here are fans of screwing the world over for a buck makes this kind of comment completely unsurprising.

I'm very confused by your attitude towards that comment. Do you think that Mozilla's non-profit/for-profit split organisation was a bad idea?

[moralestapia]

Wrong.

There's rules to follow to prevent what is called "private benefit", which OpenAI most likely broke with things like their (laughable) "100X-limited ROI" share offering.

>It is a pretty common model [...]

It's not, hence why most people are misinformed about it.

[amelius]

Who will sue them?

[moralestapia]

This guy [1], at least.

1: https://www.theguardian.com/technology/article/2024/aug/05/e...

[paperplatter]

So does OpenAI, the nonprofit, own a for-profit corp that does everything?

[meowface]

They needed capital to build what they wanted to build, so they switched from non-profit to capped-profit: https://openai.com/index/openai-lp/

We never would've gotten GPT-3 and GPT-4 if this didn't happen.

I think the irony of the name is certainly worth pointing out, but I don't see an issue with their capped-profit switch.

[voiceblue]

> We never would've gotten GPT-3 and GPT-4 if this didn't happen.

"We never would've gotten [thing that exists today] if [thing that happened] didn't happen", is practically a tautology. As you saw from the willingness of Microsoft to throw compute as well as to hire ex-OpenAI folks, as you can see from the many "spinoffs" others have started (such as Anthropic), whether or not we would've gotten GPT-3 and GPT-4 is immaterial to this discussion. What people here are asking for is open AI, which we might, all things considered, have actually gotten from a bona fide non profit.

[vintermann]

> We never would've gotten GPT-3 and GPT-4 if this didn't happen

Well, of course. But we'd get similarly powerful models elsewhere. Maybe a few weeks or months later. Maybe even a few weeks or months earlier, if, say, OpenAI sucked up a lot of talent and used it wastefully, which I don't find implausible at all.

[versteegen]

You forget that, at that time, OpenAI pushed SoTA LLMs massively forward by scaling them up ~3-4 orders of magnitude when others didn't think that would work or weren't willing to spend the money. But not just that. Following their example, Google and nVidia also attempted to scale up transformers but without really managing to push the SoTA.

So, I agree instead with meowface, and think it could even have been a 5+ year delay rather than 2 or 3. If you look at breakthroughs rather than incremental improvements, 5 years is not a long timescale. (And if OpenAI hadn't have made their breakthroughs, production of the highest-end GPUs/TPUs would be nowhere near where it is today.)

(I'm not attempting to justify OpenAI's structure or behaviour, just want to comment on one point.)

[meowface]

It's impossible to prove or disprove a counterfactual, but my guess is it would create a delay of at least one year, and possibly two or three.

[refulgentis]

Maybe all companies are doomed this way, but it was the first step on a slippery slope. Not in terms of the slippery slope logical fallacy, that's only apply if someone argued they'd end up force-hiding output before GPT-3 if they went capped profit

[paperplatter]

If they want to be for-profit because that's how they get the investment to build GPT-4, fine, do it from the start. That doesn't justify the switch.

[meowface]

It certainly would've been better, but they made OpenAI years before even GPT-1. They didn't realize how much money they'd need to scale the model or how insufficient donations would be.

I think the world is much better off with them having switched the structure vs. throwing their hands in the air and giving up because they were stuck as a non-profit forever.

[tasuki]

There was no "switch". It's a parent non-profit owning the for profit corporation.

The for profit part is fine, but how is the non-profit currently fulfilling any of its mission?

[moralestapia]

>We never would've gotten GPT-3 and GPT-4 if this didn't happen.

That doesn't justify fraud, for instance.

Unfortunately, people are becoming increasingly illiterate with regards to what is legal and what is not.

[meowface]

Where's the fraud and illegality? If they did something illegal why weren't they charged years ago?

[moralestapia]

>Where's the fraud and illegality?

Read. [1]

>If they did something illegal why weren't they charged years ago?

Because the Microsoft/OpenAI deal was not even a thing "years ago". (Duh.)

That aside, I will answer the charitable interpretation of your question by sharing a bit of knowledge about how the law process works (in the Western hemisphere).

To put someone who committed fraud in jail, law enforcement conducts an investigation to gather evidence, leading to criminal charges filed by the prosecutor.

The defendant is arraigned, and pre-trial motions may be filed before the case goes to trial, where both sides present their arguments and evidence.

If found guilty, the court imposes a sentence, which can include incarceration, restitution, and fines. The defendant may appeal the verdict.

This is a very simplified overview of the whole ordeal, which could go on for years and years depending on the complexity of the case.

1: https://www.theguardian.com/technology/article/2024/aug/05/e...

[meowface]

I think OpenAI and others persuasively shot down Musk's claims.

I'd be happy to bet you over whether or not OpenAI or Altman ever face criminal penalties over what's stated in that article.

[linotype]

I’m not sure why anyone would start a company as for-profit if it was easy to switch later on.

[moralestapia]

Any other person trying to pull that off would be in jail already, but not everyone is equal.

This is of one of those very few instances where the veil lifted off a bit and you can see how the game is set up.

tl;dr the law was made to keep those who are not "in" from being there

[deepspace]

> Any other person trying to pull that off would be in jail already.

Not ANY other person. Just people who are not rich and well-connected. See also: Donald Trump.