zlacker

the point of a non-profit is that they are allowed to make investors unhappy in pursuit of the greater mission

A non-profit isn’t supposed to have investors. This structure should never have been allowed in the first place (nor IKEA.)

>>bradle+(OP)
Which is why investors that signed on got a giant warning saying that the Board could choose to be unprofitable if they wanted and that the mission came first, so they should view their investment as a donation.

>>lucubr+D
What we're seeing is that (predictably) the investors have decided that they don't care that they agreed with it and they don't want to lose out on their investment.

What remains to be seen is just how closely the board holds the charter to their hearts and whether the governance structure that was built is strong enough to withstand this.

>>lucubr+D
A giant warning doesn’t make it better. Non profit or for profit—-pick one and stick to it.

>>bradle+(OP)
Whether it will ultimately have been allowed is yet to be seen.

>>bradle+(OP)
> A non-profit isn’t supposed to have investors.

The non-profit doesn't have investors. OpenAI Global, LLC isn't the non-profit, its a for-profit over which the non-profit has complete governance control.

>>bradle+51
The distinction between the two is whether an organization returns funds to investors. OpenAI, Inc. does not. OpenAI Global LLC does, one of those investors being OpenAI, Inc. (well, indirectly, there's another holding company in between.)

>>cthalu+01
MSFT likely has the option to claw back some of their money - they could also cease providing Openai gpu’s. At the extreme, they could do so tomorrow based on their perception of the contract dispute. Although such action would risk reputational damage to MSFT.

At a minimum, taking your largest supplier and customer for a ride is probably a bad idea.

>>lumost+R2
It wouldn't be a good idea in a regular business, for sure.

But non-profits aren't a regular business and their ultimate obligation is to their charter. Depending on just what the level of misalignment was here, it's possible that the company becoming nonviable due to terminating Altman is serving the charter more closely than keeping him on board.

No one posting here has enough detail to really understand what is going on, but we do know the structure of OpenAI and the operating agreement for the for-profit LLC make it a mistake to view the company from the lens as we would a regular for-profit company.

>>cthalu+01
Agreeing that the board has a right to do something does NOT waive one’s right to complain that it is a mistake to actually do it.

Never been a fan of the “you can’t complain about any bad outcome you agreed could happen” argument.

>>lucubr+D
Donors like that threaten to pull their money when you don’t behave. It’s why they donate. There is no such thing as a donation.

>>lumost+R2
most of the money likely wasnt paid, and is based on milestones and future returns. I imagine MSFT has some solid licensing bought with their initial payments.

>>dragon+w2
These details are totally irrelevant to the argument and are part of the chart that’s floating around everywhere.

Of course it’s legal, the comment was that it shouldn’t be.

>>lumost+R2
The damage would be far more than reputational - Microsoft are starting to roll out “AI with everything” on most of their money-making products. That’s all provided by OpenAI, they can’t just pause for 6+ months and re-implement it with a new provider.

>>brooks+04
If this had been presented as a bad outcome or even an improbable one I would agree. And of course you can just complain and do whatever you want in general within the boundaries of the law, free speech, etc.

But if you sign an agreement saying you understand you should treat your investments more like donations and that everything is secondary to the goals of the non-profit and then are upset that your goals were not placed in higher priority than the charter of the non-profit, I'm going to reserve the right to think you're a hypocrite.

>>cthalu+Z3
We can view it from any lens.

In any lens if microsoft pulls their GPUs and funding, then OpenAI is through.

No, pissing microsoft off in this situation is not a good idea. Because microsoft can shut the whole organization down.

>>cthalu+C6
“Hypocrite” does not mean what you think it does.

Microsoft nor anyone else said they deeply believed in and prioritized OpenAI’s charter over their own interests. They might have agreed to it, and they must abide by agreements, but this is not a case of claiming one set of principles while acting contrary to them.

>>bradle+(OP)
I think in IKEA's case, they rapidly restructured to avoid https://en.wikipedia.org/wiki/Employee_funds which was a rather short-lived political experiment.

>>helsin+L5
There is no world in which MSFT ponied up 10 Billion without an escrow of the model. Depending on the partnership terms and next steps of OpenAI - this could be a significant breach.

Given the complex org structure - I wouldn’t be surprised if the non-profit (or at least it’s board) wasn’t fully aware of the contract terms/implications.