zlacker

>>modele+(OP)
Allowing startups to begin as non-profits for tax benefits, only to 'flip' into profit-seeking ventures is a moral hazard, IMO. It risks damaging public trust in the non-profit sector as a whole. This lawsuit is important

>>therei+4H
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

>>eightn+LQ
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?

>>andrew+hS
> 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

>>eightn+ZU
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.