OPENAI, INC., a corporation,
OPENAI, L.P., a limited partnership,
OPENAI, L.L.C., a limited liability company,
OPENAI GP, L.L.C., a limited liability company,
OPENAI OPCO, LLC, a limited liability company,
OPENAI GLOBAL, LLC, a limited liability company,
OAI CORPORATION, LLC, a limited liability company,
OPENAI HOLDINGS, LLC, a limited liability company,According to https://openai.com/our-structure the non-profit is "OpenAl, Inc. 501(c)(3) Public Charity".
In crypto these kind of complex structures are fairly common ,FTX has some 180 entities. Real estate companies like evergrand have similar complexities.
Companies which do lot of acquisitions will have lot of entities and for accounting may keep them .
Consulting companies including the big ones have similar complex structures each business has their own partners who get a cut of the profits directly and pay only some back to the parent.
Hollywood also does such complex accounting for variety of reasons
Compared to peers in the AI space this is probably unusual, but none of them started as non profit . The only somewhat comparable analogy is perhaps Mozilla (nonprofit tech with huge for profit sub) they are not this complex, they also don’t have the kind of restrictions on founding charter /donor money like openAI does
It explains at least three of the entities, but I do wonder about the purpose of some of the other entities. For example, a limited partnership is quite odd to have hanging around, I'm wondering what part it plays here.
Apparently a non-profit can own all the shares of a for-profit
> 70. In the years following the announcement of the OpenAI, L.P., OpenAI’s corporate structure became increasingly complex.
You can imagine a non-profit buying enough shares of a for-profit company that it can appoint the for-profit company's board of directors, at which point it's a subsidiary.
Heck a non-profit is even allowed and encouraged to make a profit. There are certainly rules about what non-profits can and can't do, but the big rule is that a non-profit can't distribute its profits, ie. pay out a dividend. It must demonstrate that their expenditures support their tax exempt status, but the for-profit subsidiary is more than welcome to pay out dividends or engage in activities that serve private interests.
Can you explain that? It seems outrageous to me.
This works when there's an obvious non-profit that has a monetizable product. The latter conflicts with the former, so it requires a disconnect. Meanwhile, if Apple tried to do the same, investors would look at that as obviously shady. In addition, non-profits are more heavily restricted by the government.
Lastly, you can't just "take the money" and "do what you want"; fraud, malfeasance, fiduciary responsibility (in the corporate entity), etc still exist. It's not some magic get out of jail free card.
It was a "legal fiction" to sidestep union rules, government employment regulations, etc...
This let them hire IT staff at market rates, because otherwise they couldn't pay them a competitive wage as normal public servants working directly for the departments.
(If your local gym is structured as 6-8 entities you should probably not go there because you're going to be screwed if you injure yourself.)