zlacker

What’s the point of the subsidiary?

Nonprofits can already raise funds by e.g. selling T-Shirts, baked goods, ai services, etc…

>>goodlu+(OP)
It is hard to attract multi-billion dollar investments and attract elite AI talent when competing with for-profits. This was the stated reason and makes a lot of sense. The comp packages for elite AI talent is now claimed to be in the range of $10M.

>>goodlu+(OP)
If a nonprofit has mostly revenue and few donations (Mozilla) the IRS revokes their tax exemption. OpenAI could not have done the Microsoft deal as a nonprofit.

>>goodlu+(OP)
To maintain a clear separation between for-profit and non-profit activities. If a non-profit operates in a market with for-profit competitors, tax authorities may start considering it a for-profit organization, making all of its income taxable.

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.

>>goodlu+(OP)
Lol, 10 billion dollars of cookies and t-shirts. They'll have to be bigger than Nestle and Zara. To sell AI services, they need to build it and for that they need the money.

>>goodlu+(OP)
> What’s the point of the subsidiary

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.