investors in OpenAI’s commercial entity were capped at making 100 times their money
They should never be allowed to call this a "non-profit"
What a dirty lie in the first place!
this post was submitted on 06 May 2025
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No, those were the terms when the company was "for profit." Now that they're "nonprofit" the investors can make unlimited profit.
The billions of dollars the company raised in its last two funding rounds were contingent on successfully removing this limit on investor returns.
A maximum of 10,000% profit is "nonprofit"? Any country that allows for something like this is a joke.
Oh, thanks for pointing that out.... my head was just going "Fuck Sam Altman .. Fuck Sam Altman .. Fuck Sam Altman .. Fuck Sam Altman .. Fuck Sam Altman ...." ---
OpenAI’s commercial entity
They should never be allowed to call this a "non-profit"
They never did. The nonprofit parent owned shares in a for-profit subsidiary, which was structured in a way that investors in the for-profit subsidiary could never control the company (the nonprofit would own a controlling share) and had their gains capped at 100x.
That's still a common structure used by billionaires to justify reaping millions of dollars in revenue and still claim, "but I own a non-profit". Also, to say the nonprofit controls the profit part would require the governance and the management hierarchies to be separate to avoid conflict of interests. But this has never been the case. Now they're becoming a public benefit company, it will be even less the case, with both boards being one and the same. This will effectively keep the good-will façade while allowing them to lift the profit caps for their friends. It's all PR bullshit.
“Previously, investors in OpenAI’s commercial entity were capped at making 100 times their money before the rest of its profits flowed back to the nonprofit.
With the new PBC subsidiary, OpenAI spokesperson Steve Sharpe tells me that investors and employees will own regular stock with no cap on how much it can appreciate. “
They got exactly what they want anyway. This is no victory.
This doesn't sound like a nonprofit.
The billions of dollars the company raised in its last two funding rounds were contingent on successfully removing this limit on investor returns.
This doesn't make sense to me. The ultimate value of shares is in the dividends they represent, no? If there are no dividends ever, what are they sharing in? Is it just a postponement until future dividends? A share in control of activities?
I get that there'll be speculation that will keep values increasing, and selling can net a profit, but what does the last share-holder get?
what does the last shareholder get?
https://en.wikipedia.org/wiki/Greater_fool_theory
Once the bubble pops they’ll rugpull the same way they do crypto. Either that or it will grow so large that they convince someone to aquire them wholesale
This is just every economic endeavour in existence nowadays, the issue with cryptocurrency is that it contains no guard rails (+ environmental issues)
Unless you work for a corporation, ask your employer what their exit strategy is.
Technology and intellectual property, including patents. These are only put up for sale if the company is liquidated or declared bankrupt.
They asked chatGPT for a business plan and it gave them hallucinations and half a business plan for a non-profit coalmining organization.
That or they have worked out that even if AGI is achievable with the current architecture the existence of R1 and other Chinese models essentially means they will never make a profit at it.
If they achieve their goal, within 48 hours the open source community will have replicated it.
So they're slowly admitting genAI is unprofitable...
Their current structure is still profit-oriented. You should read the article maybe.
The structure of OpenAI is quite strange and curious.
Metroid layout.
GPT is the boss located left, the final boss is called Profit, and it's at the bottom...
Probably an emergent structure out of a chain of thought
Well yeah. DeepSeek destroyed any illusion that they could establish and maintain a monopoly on AI.
establish a nonprofit
get funding from corporate donors
produce a product
generate a profit
?
profit
Wasn’t a major tranche of Softbank’s funding contingent on their being able to do this? They might be broke a lot sooner than people thought without it…
"we can make enough money without it"
Great news.