Well this probably disproves the theory that it was a power grab by Microsoft. It didn’t make too much sense anyway since they already have access to tech behind GPT and Microsoft doesn’t necessarily need the clout behind the OpenAI brand.
* Exclusive access to resell OpenAI's technology and keep nearly all of that revenue for themselves, both cloud and services
* Receive 75% of OpenAI's profits up to $1 trillion
My guess at this point is financial malfeasance, either failing to present a deal to the board or OpenAI has been in financial straits and he was covering it up.
Maybe almost had to since it was during market hours.
Perhaps it's all legal but I think it's very understandable to look at it and think it's a travesty.
> OpenAI is an American artificial intelligence (AI) organization consisting of the non-profit OpenAI, Inc.[4] registered in Delaware and its for-profit subsidiary corporation OpenAI Global, LLC.[5]
IKEA [0] and Rolex [1] are structured in a similar manner, although different since they’re not US based.
[0] https://en.m.wikipedia.org/wiki/Stichting_INGKA_Foundation
[1] https://en.m.wikipedia.org/wiki/Hans_Wilsdorf#Hans_Wilsdorf_...
Nonprofits can already raise funds by e.g. selling T-Shirts, baked goods, ai services, etc…
Buying them (or getting de facto control) is clearly an easier way to achieve that, vs. replicating the technology in-house.
IMO this is the most important part of Nadella's blog post:
> Most importantly, we’re committed to delivering all of this to our customers while building for the future.
It's curious to me that they see the departure of Sam Altman as a reason to remind us that they are "building for the future" (which I take to mean: working toward independence from OpenAI). I think it actually lends credence to the theory that this was a failed power grab of some sort.
I'm not saying I think it WAS that, but come on.
Through the public actions of Sam Altman in various places like the US congress it has become rather clear that his goals are to device and fear monger to create an environment of regulatory capture where due to misguided laws OpenAI will have an unfair competitive advantage.
This might be quite in line with what Microsoft tends to like. But it also can be a risk for MS if regulation goes even a step further.
This is also in direct opposition with the goals OpenAI set themself and which some of the other investors might have.
So MS being informed last minute to not give them any chance to change that decision is quite understandable.
At the same time it might have been pushed under the table by people in MS which where worried it poses to much risk, but which maybe e.g. might need an excuse why they didn't stop it.
Lastly is the question why Sam Altman acted the way he did. The simplest case is greed for money and power, in which case it would be worrying for business partners at how bad he was when it comes to public statements not making him look like a manipulative untranslatable **. The more complex case would be some twisted believe that a artificial pseudo monopoly is needed "because only they [OpenAI] can do it in the right way and other would be a risk". In that case he would be an ideologically driven person with a seriously twisted perception of reality, i.e. the kind of people you don't want to do large scale business with because they are too unpredictable and can generally not be trusted. Naturally there are also a lot of other options.
But one thing I'm sure about is that many AI researchers and companies doing AI products did not trust the person Sam Altman at all after his recent actions, so ousting him and installing a different CEO should help increasing trust into OpenAI.
And maybe to allow choosing the right people for the right job. If the non-profit has an ideological purpose, its leadership should probably reflect that. At the same time, the for-profit subsidiary probably works better under professional management.
Have you read any news about Mozilla's budget in the past 10 years or so?
> Robert Bosch GmbH, including its wholly owned subsidiaries, is unusual in that it is an extremely large, privately owned corporation that is almost entirely (92%) owned by a charitable foundation. Thus, while most of the profits are invested back into the corporation to build for the future and sustain growth, nearly all of the profits distributed to shareholders are devoted to humanitarian causes.
> [...] Bosch invests 9% of its revenue on research and development, nearly double the industry average of 4.7%.
(Source: Wikipedia)
I always considered this a wonderful idea for a tech giant.
You basically never have a person in the chain actually making decisions for anything but to maximize profit.
Revenue/Expenses/Net Assets
2013: $314m/$295m/$255m
2018: $450m/$451m/$524m
2021: $600m/$340m/$1,054m
(Note: "2017 was an outlier, due in part to changes in the search revenue deal that was negotiated that year." 2019 was also much higher than both 2018 and 2020 for some reason.)
2018 to 2021 also saw their revenue from "Subscription and advertising revenue"— Representing their Pocket, New Tab, and VPN efforts to diversify away from dependence on Google— Increase by over 900%, from $5m to $57m.
https://foundation.mozilla.org/en/who-we-are/public-records/
Seriously, Mozilla gets shat on all the time, presumably because they're one of the few sources of hope and therefore disappointment in an overall increasingly problematic Internet landscape, and I wish they would be bigger too, but they're doing fine all things considered.
Certainly I wouldn't say their problems are due to this particular apsect of their legal structure.
MS doesn't care about how money it cost, they care about the fact it's their ticket back into the fight with google and apple.
First, the “OpenAI" whose profits are being discussed isn't a 501(c)3 charity, but a for-profit LLC (OpenAI Global, LLC) with three other organizations between it and the charity.
Second, charities and other nonprofits can make profits (surplus revenue), they just can't return revenues (but they can have for profit subsidiaries that return profit to them and other investors in certain circumstances.)
> The whole umbrella for-profit corp they formed when they became popular should be illegal
The umbrella organization is a charity. The for profit organizations (both OpenAI Global LLC that Microsoft invests in, and its immediate holding company parent which has some other investors besides the charity) are subordinate to the charity and its goals.
> and is clearly immoral.
Not sure what moral principal and analysis you are applying to reach this conclusion.
But they are similar in that both involve a nonprofit controlling subordinate for-profit entities.
Closing the huge fundraising gap OpenAI had as a nonprofit by returning profits from commercial efforts instrumental to, but distinct from, the nonprofits charitable purpose, without sacrififing any governance or control of the subordinate entity.
I think they get shat on all the time because of what you mentioned but also because they consistently fail to deliver a good browser experience for most of their still loyal users.
Most of the people I talk to who still use their product do so out of allegiance to the values of FOSS despite the dog-shit products they keep foisting upon us. You'd think we'd wise up several decades in by now.
so if he believed everything he sayed it means he would be incompetent, which just can't be true however I look at it (which means I'm 100% certain sure he acted dishonest in congress, and like I sayed before I'm not fully sure why but it's either way a problem as he lost the trust of a lot of other people involved through that and some other actions).
I'm not the parent, but I think it's clear: if I'm a charity, and I have a subordinate that is for profit, then I'm not a charity. I'm working for profit, and disguising myself for the benefits of being a charity.
The most obvious example is the corporate foundation, but if we believe the first result from a search you're right in they are controlled but not owned by the for-profit:
> A for-profit cannot own a nonprofit because a nonprofit has no owners. However, a for-profit can set up a structure in which it effectively has control over the nonprofit, subject to applicable laws, including those regarding private inurement, private benefit, and corporate self-dealing
> https://nonprofitlawblog.com/can-a-nonprofit-own-a-for-profi...
Obviously, the for profit subsidiary ooerates for profit—and where its not a wholly owned subsidiary, it may return some profit to investors that aren't the charity—but neither the subsidiary nor the outside investors getbthe benefits of charity status.
The girl guides are a non-profit; they teach kids about outdoor stuff, community, whatever, they do good works, visit old folks, etc.
If for some legal reasons they had a subsidiary that sold cookies (and made a profit), with all the profits returned to the non-profit parent, I think that'd be ....fine? Right?