These people "donated to a non-profit". They did not "invest in a for-profit".
If the Red Cross suddenly turns into a for-profit and then says "well we'll give our donators of the past few years equity in our new company", this does not make it any less of a scam.
> Seems like the donors are ok with OpenAI pivot to for-profit
If you have information that shows this, feel free to add it. "Not suing" is not the same as that. Very few people sue even when they feel they're scammed.
>These people "donated to a non-profit". They did not "invest in a for-profit".
Sure, nobody wants to be tricked into donating to a charity and then have their money disappear into a for-profit company.
Based on the interviews I saw from some donors (Reid Hoffman, etc), there's more nuance to it than that. The donors also wanted an effective non-profit entity. The TLDR is that they donated to a non-profit under 2015 assumptions of AGI research costs that turned out to be wrong and massively underestimated.
- 2015... the non-profit OpenAI in its original idea of "charity research organization" was flawed from the beginning because they realized they couldn't attract A.I. talent at the same level as Google/Facebook/etc as those competitors offered higher salaries and lucrative stock options. Then, they realized the initial ~$100 million in donations was also not enough to pay for very expensive hardware like GPUs and datacenters. It's hard for researchers to make discoveries in AGI if there's no cutting edge hardware for them to work on. A non-profit tech charity getting billions in donations was not realistic. These money problems compound and lead to...
- 2019... create the for-profit OpenAI Global LLC as a vehicle for the Microsoft investment of $1 billion and also create stock incentives for recruiting employees. This helps solve the talent acquisition and pay-for-expensive-hardware problems. This for-profit entity is capped. (https://openai.com/our-structure/)
(Side note: other non-profit entities with for-profit subsidiaries to supplement funding include Goodwill, Girl Scouts of America, Salvation Army, Mozilla, etc.)
We can't know all the back room dealings but it seemed like the donors were on board with the 2019 for-profit entity. The donors understood the original non-profit was not viable to do AGI work because they underestimated the costs. The publicly revealed emails that as early as 2017, Elon was also pushing to switch OpenAI to be a for-profit company.[1] But the issue was Elon wanted to run it and Sam disagreed. Elon left OpenAI and now he has competing AI businesses with xAI Grok and Tesla AI which makes his lawsuit have some conflicts of interest. I don't which side to believe but that's the soap opera drama.
Now in 2024, the 2019 for-profit OpenAI Global LLC has shown structural flaws because the next set of investors with billions don't want to put money into that LLC. Instead, the next investors need a public incorporated company with ability to IPO as the vehicle. That's where Sam wants to create another for-profit OpenAI Inc without the cap. We should be skeptical but he argues that a successful OpenAI will funnel more money back to the non-profit OpenAI than if it were a standalone non-profit that didn't take billions in investment.
These people "donated to a non-profit". They did not "invest in a for-profit".
If the Red Cross suddenly turns into a for-profit and then says "well we'll give our donators of the past few years equity in our new company", this does not make it any less of a scam.
> Seems like the donors are ok with OpenAI pivot to for-profit
If you have information that shows this, feel free to add it. "Not suing" is not the same as that. Very few people sue even when they feel they're scammed.