>I kind of thought that was the point of the current structure.Yes, it is but if we only stopped the analysis right there, we could take pleasure in the fact that Sam Altman checkmated himself in his own blog post. "Dude, the non-profit is _supposed_ to control the profit company because that's how you formed the companies in the first place! Duh!!!"
To go beyond that analysis, we have to at least entertain (not "agree" but just _entertain_ for analysis) ... what Sam is saying:
- the original non-profit and profit structure was a mistake that was based on what they thought they knew at the time. (They thought they could be a "research" firm.)
- having a non-profit control the profit becomes a moot point if the for-profit company becomes irrelevant in the marketplace.
Here is a key paragraph:
>The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission. We once again need to raise more capital than we’d imagined. Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness.
In other words, let's suppose the old Friendster social network was structured as "non-profit-board-controlling-a-for-profit-Friendster" like OpenAI. The ideals of the "non-profit being in control" is a moot point when a competitor like Facebook makes non-profit-Friendster irrelevant.
Or put another way, pick any hard problem today (self-driving, energy discovery, etc) that requires billions of investment and hypothetically create a new company to compete in that space. Would creating that company as a non-profit-controlling-the-profit-company confer any market advantage or would it be a handicap? It looks like it's a handicap.
OpenAI is finding it hard to compete for investors' billions in the face of Tesla's billions spent on 50000 GPU supercluster, Google billions spent on Gemini, Anthropic billions spent on Claude, Alibaba's billions, etc. OpenAI doesn't have an unassailable lead with ChatGPT.
The issue is Sam Altman & OpenAI look bad because he and the investors want to use the existing "OpenAI" brand name in a restructured simpler for-profit company. But to outsiders, it looks like a scam or bait-and-switch. Maybe they could have done an alternative creative procedure such as spin up a totally new for-profit company called ClosedAI to take OpenAI's employees and then pay a perpetual ip license to OpenAI. That way, CloseAI is free of encumbrances from OpenAI's messy structure. But then again, Elon Musk would still probably file another lawsuit calling those license transfers as "bad faith business dealings".
Yes, it is but if we only stopped the analysis right there, we could take pleasure in the fact that Sam Altman checkmated himself in his own blog post. "Dude, the non-profit is _supposed_ to control the profit company because that's how you formed the companies in the first place! Duh!!!"
To go beyond that analysis, we have to at least entertain (not "agree" but just _entertain_ for analysis) ... what Sam is saying:
- the original non-profit and profit structure was a mistake that was based on what they thought they knew at the time. (They thought they could be a "research" firm.)
- having a non-profit control the profit becomes a moot point if the for-profit company becomes irrelevant in the marketplace.
Here is a key paragraph:
>The hundreds of billions of dollars that major companies are now investing into AI development show what it will really take for OpenAI to continue pursuing the mission. We once again need to raise more capital than we’d imagined. Investors want to back us but, at this scale of capital, need conventional equity and less structural bespokeness.
In other words, let's suppose the old Friendster social network was structured as "non-profit-board-controlling-a-for-profit-Friendster" like OpenAI. The ideals of the "non-profit being in control" is a moot point when a competitor like Facebook makes non-profit-Friendster irrelevant.
Or put another way, pick any hard problem today (self-driving, energy discovery, etc) that requires billions of investment and hypothetically create a new company to compete in that space. Would creating that company as a non-profit-controlling-the-profit-company confer any market advantage or would it be a handicap? It looks like it's a handicap.
OpenAI is finding it hard to compete for investors' billions in the face of Tesla's billions spent on 50000 GPU supercluster, Google billions spent on Gemini, Anthropic billions spent on Claude, Alibaba's billions, etc. OpenAI doesn't have an unassailable lead with ChatGPT.
The issue is Sam Altman & OpenAI look bad because he and the investors want to use the existing "OpenAI" brand name in a restructured simpler for-profit company. But to outsiders, it looks like a scam or bait-and-switch. Maybe they could have done an alternative creative procedure such as spin up a totally new for-profit company called ClosedAI to take OpenAI's employees and then pay a perpetual ip license to OpenAI. That way, CloseAI is free of encumbrances from OpenAI's messy structure. But then again, Elon Musk would still probably file another lawsuit calling those license transfers as "bad faith business dealings".