[az226]

100% disagree.

- in 2025, OpenAI’s for-profit entity recapitalized from a capped-profit entity with residuals flowing to the nonprofit to a traditional public benefit corporation with traditional equity

This is the egregious part. Before full for profit conversion it was worth $300B. Then after $850B.

A true fiduciary would set an auction and that would set the price for for profit valuation. And then all existing investors would keep the value of their positions, but would be diluted because capped profit is worth much less than unlimited profit and residuals.

But, they sold it to themselves for a bargain basement price. The nonprofit lost out on $300B or so. Maybe more.

It was not an arm’s length transaction. It was self-dealing.

[senordevnyc]

I may not be fully understanding it, but if the value went from $300B to $850B because of the conversion, then you can’t claim that the additional value was stolen from the nonprofit. As long as the entity was unconverted, there was a limit to what the market would value it at. Is this off?

[az226]

All investors owned profit participation units with limited (capped) profits and limited return size.

After conversion, they all own unlimited profit, unlimited return shares. A lot more valuable.

The nonprofit lost the value between the two.