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[return to "We have reached an agreement in principle for Sam to return to OpenAI as CEO"]
1. garris+EJ[view] [source] 2023-11-22 11:59:46
>>staran+(OP)
If OpenAI remains a 501(c)(3) charity, then any employee of Microsoft on the board will have a fiduciary duty to advance the mission of the charity, rather than the business needs of Microsoft. There are obvious conflicts of interest here. I don't expect the IRS to be a fan of this arrangement.
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2. stikit+Ki1[view] [source] 2023-11-22 15:08:35
>>garris+EJ
OpenAI is not a charity. Microsoft's investment is in OpenAI Global, LLC, a for-profit company.

From https://openai.com/our-structure

- First, the for-profit subsidiary is fully controlled by the OpenAI Nonprofit. We enacted this by having the Nonprofit wholly own and control a manager entity (OpenAI GP LLC) that has the power to control and govern the for-profit subsidiary.

-Second, because the board is still the board of a Nonprofit, each director must perform their fiduciary duties in furtherance of its mission—safe AGI that is broadly beneficial. While the for-profit subsidiary is permitted to make and distribute profit, it is subject to this mission. The Nonprofit’s principal beneficiary is humanity, not OpenAI investors.

-Third, the board remains majority independent. Independent directors do not hold equity in OpenAI. Even OpenAI’s CEO, Sam Altman, does not hold equity directly. His only interest is indirectly through a Y Combinator investment fund that made a small investment in OpenAI before he was full-time.

-Fourth, profit allocated to investors and employees, including Microsoft, is capped. All residual value created above and beyond the cap will be returned to the Nonprofit for the benefit of humanity.

-Fifth, the board determines when we've attained AGI. Again, by AGI we mean a highly autonomous system that outperforms humans at most economically valuable work. Such a system is excluded from IP licenses and other commercial terms with Microsoft, which only apply to pre-AGI technology.

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3. ezfe+zv1[view] [source] 2023-11-22 16:06:11
>>stikit+Ki1
The board is the charity though, which is why the person you're replying to made the remark about MSFT employees being appointed to the board
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4. UrineS+Bw1[view] [source] 2023-11-22 16:11:14
>>ezfe+zv1
A charity is a type of not-for-profit organisation however the main difference between a nonprofit and a charity is that a nonprofit doesn't need to reach a 'charitable status' whereas a charity, to qualify as a charity, needs to meet very specific or strict guidelines
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5. ezfe+3X1[view] [source] 2023-11-22 18:06:40
>>UrineS+Bw1
Yes, I misspoke - I meant nonprofit
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6. zja+Vs2[view] [source] 2023-11-22 20:33:41
>>ezfe+3X1
You were right though, OpenAI Inc, which the board controls, is a 501c3 charity.
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