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I'd be pretty peeved if I backed a non-profit through its most-risky early days only for them to turn around and shun the original philanthropic mission in the spirit of profit maximization...


Not quite how that played out. He wanted complete control, they told him no, he pulled his money in the hopes of bankrupting them. When he reneged on the $1 billion he pledged in funding they were forced to seek funding elsewhere (Microsoft).

https://www.theverge.com/2023/3/24/23654701/openai-elon-musk...


OpenAI went from a not-for-profit institution seeking to build in a safe and fair way that wouldn't advantage a handful of tech elite to very much the opposite. We can speculate on Musk's own motivations or call him a hypocrite but he's not wrong in pointing out OpenAI's sketchy behavior.


They needed Musk's pledge of $1B to remain non-profit. When he took back that money, their only choice was to either A) shut-down or B) go profit.

I think most people (aside from Elon) are happy they didn't shut-down.


If I remember correctly, they started a for-profit side business (initially to bring in a little cash) and Musk was concerned about the way it was developing and who was gaining power over the company as a result. Perhaps he just wanted to stay in charge and didn't like other VCs moving into his turf, but it's also apparent that his expressed concerns at the time proved wildly accurate.


Hm. I've never seen anything about a for-profit side business before Musk left. Do you have any references for that?


Yeah, I've Googled around and even asked ChatGPT. There seems to be no record of a for-profit side business. At least before Elon left. Of course they created one about a year after he left, because they're were running out of money, and would need to shut-down otherwise.

I can understand not wanting Elon to be the head of your company. His behavior is a little erratic.


We don't have to speculate on his motivations. He's literally bankrolling a competitor.


You're still missing the part where a not for profit literally turned itself into a multi billion dollar for profit company and no ones been held accountable.


Nonprofits have to do that if they engage in commercial activity for tax reasons. You can't just group whatever activities you want under a nonprofit and make all that money tax free. OpenAI had to split it off as a for-profit once they had a product to sell to the public. The nonprofit didn't "turn into" a for-profit, the nonprofit owns the corporation.

Mozilla has the same structure with a for-profit corporation owned by the nonprofit, which allows it to take Google's money in exchange for default search engine placement. Likewise with Wikipedia/Wikimedia, Newman's Own, and so on.


> the nonprofit owns the corporation

They only own about 2% of it. The rest is split between Microsoft and other investors.


The nonprofit has 100% control of the for-profit entity, though it does not have 100% of equity.


Even so, it doesn't matter. Controlling board has been replaced by cronies who have no interest in the original altruistic purpose of the company, whether they call themselves not-for-profit or not.


The have 100% de jure control and 0% de facto control.


You absolutely can. You just can't distribute the results as dividends.


No, you absolutely can't. Nonprofits can't engage in substantial business activities that are unrelated to their mission. If they do, they can lose their non-profit status.

https://www.irs.gov/pub/irs-pdf/p598.pdf

https://www.thetaxadviser.com/issues/2021/jun/unrelated-busi...


I'm trying to wrap my head around your point and having a real hard time understanding what the problem is.

Yes, openai can't be a butcher, a baker, or a candlestick maker. This is a feature not a bug.


The problem is that you don't understand how tax exemption works?

According to the OpenAI charter, their mission is to "ensure that artificial general intelligence benefits all of humanity." That's their legally binding mission - not selling cloud services by the token or licensing their models to companies like Microsoft and Apple. Any lawyer with half a brain would have advised them that those activities would almost certainly be found by the IRS and the courts to be unrelated business activities, so they spun them off as a for-profit corporation instead of taking an entirely unnecessary risk.

Just because their product is vaguely AGI related doesn't mean it has anything to do with their actual mission.


I've ran a not for profit worth ~$100m. All of those things are ones which fall within the original charter of openai. It's only when you start doing completely unrelated activities, like Mozilla's women who code, or you start raiding the coffers of the organization, like Wikipedia, that you need fancy structures to hide the blatant theft.


> I've ran a not for profit worth ~$100m.

Based on this thread I find that incredibly hard to believe. Incredibly.

> It's only when you start doing completely unrelated activities, like Mozilla's women who code

Or like... Mozilla Firefox. Cause that's why they've had Mozilla Corporation since 2005. Google pays the corporation for default search engine placement and all of the full time Firefox developers I've ever known have worked for the corporation, not the nonprofit.


>Based on this thread I find that incredibly hard to believe. Incredibly.

It doesn't take much more than showing up and taking responsibility when no one else does.

>Or like... Mozilla Firefox. Cause that's why they've had Mozilla Corporation since 2005.

Yes, because Mozilla has always wanted to do more than be a browser company.

Remember Firefox OS?

Not for profits who have weird structures are there to make sure they can be looted for the benefit of the people running them, or to be used for pet projects that have nothing to do with the original charter.


Mozilla Corporation creation had nothing to do with Firefox OS or ambitions beyond Mozilla as a browser company -- it was forced on us by the IRS, after they'd promised we could take sponsorship revenue from Google for the search deal, directly into the non-profit, tax-free.

The IRS reneged, which led to the creation of the Mozilla Corporation for-profit subsidiary in 2005 to take the Google search revshare from that time on (we paid negotiated back taxes for the period when they said sponsorship revenue was okay to take tax-free into the 501c3).


> It doesn't take much more than showing up and taking responsibility when no one else does.

Your argument aside, I am interested to hear you found it straightforward to run a successful non-profit.

Any tips for someone who is interested to enter that space?


Talk to people, be helpful, find what the pain points of the organization are and solve them.

If you don't turn it into a personal fiefdom expect hard work, no gratitude and eventual burnout.


Elon Musk kept giving OpenAI money after they announced they did that (even admitted that in the complaint!), which makes me suspect he's not as miffed about that decision as he claims to be.


Notice how many times Elon Musk appears in my comment.


Since we're commenting on an article about Musk's suit against OpenAI purportedly seeking the accountability the lack of which you decry, it is reasonable to assume even in the absence of a direct mention that you are expressing an opinion on the merits of Musk's suit, at least re seeking accountability of OpenAI. Especially when you comment is a direct reply to someone talking about Musk.


But I'd agree that Musk is a distraction here. OpenAI started as a non-profit project working to prevent exactly the type of irresponsible, profit-driven AI arms race it now engages in. Whether Musk is an angel or a demon is immaterial.


You should assume less and read more.


He formed x.ai. Is it non profit?


That would only be a "gotcha" if he claimed it was going to be a non-profit all along, then pulled a switch-a-roo a la OpenAI style...


"in the hopes of bankrupting them"

Where do you get that idea?

How exactly were they entitled to his $1B donation?


The person you are replying to said nothing about being entitled to the money. You are moving goal posts.

This is the equivalent of me coming to you and promising you money so that you can pull off a risky business move, then at the critical moment when I don’t like something pulling that money. Sure I might be entitled to do that as it is my money, but it’s a dick move and would certainly leave you holding the bag.


"it’s a dick move" implies that you are somehow entitled to that money. Otherwise it's a fair move.

It is extremely delusional to expect to receive $1 billion dollars unconditionally.


As my dad used to say: being an asshole isn't illegal.


They declined to give Elon Musk control when he offered them a billion to save the company. Instead they turned around and gave up control to Microsoft for billions.

Do you honestly believe that if you were in Elon Musks shoes, that you would have given away a billion dollars without any conditions? How would you feel when you saw them turn around and sell out to Microsoft instead? Expecting $1B unconditionally seems like an asshole expectation. Delusional and childish entitlement.

Do you believe that Microsoft has donated billions to OpenAI unconditionally?


> How would you feel when you saw them turn around and sell out to Microsoft instead?

They did not give up control to Microsoft.

If that were true, the Apple deal (which Microsoft opposed) would not have just happened.


Having Apple dependent on and paying for Microsoft infrastructure is a win for Microsoft. Of course the deal benefits Microsoft as much as Apple.

Microsoft needs Apple as a strong competitor. Otherwise they will be declared a monopoly and broken up by regulators. Microsoft was smart to use OpenAI as a proxy for this deal.


> Having Apple dependent on and paying for Microsoft infrastructure is a win for Microsoft.

LOL!

I would love to see your evidence that Apple's new AI offering will be running on Microsoft's infrastructure.


It was a public announcement. https://openai.com/index/openai-and-apple-announce-partnersh...

OpenAI models run on Azure infrastructure. Apple is just a client and will be paying Microsoft via OpenAI to run it.

Apple also has their own models running on their own infrastructure. I'm not saying that Microsoft or OpenAI has anything to do with that.


That's SO WEIRD. When I load that page, I see no mention of Azure.


[flagged]


OpenAI's current infrastructure runs on Azure.

Do you have any evidence that their new Apple services will run on Azure?


It's impossible to discuss this with you as you keep changing your comment.

I never once implied it would run on Apple servers. You're putting words in my mouth. I am asking if you have any direct evidence that they'll be running on Azure.

The fact that you keep dodging that question tells me you don't.


> Holy shit you are a fucking moron. I posted direct links to everything.

Holy shit you are a fucking moron! None of your links say anything about Apple's new services.

I think it's safe to say we're not going to find common ground here. You have a nice day.


Sorry for the shit language but I got tired of you not understanding anything.

Apple's services do not run on Azure. Apple's services run on Apple infrastructure.

OpenAI services run on Azure

Apple is a new partner of OpenAI. Apple will use OpenAI services which run on Azure. Hopefully that makes sense. It is not that complicated.


Yeah, I saw a story that backed up your claims after you left. Sorry I didn't just take your word for it - but that's not how it's done, you know? Strangers on the internet sometimes lie. Perhaps you've never encountered it before.

> Sorry for the shit language but I got tired of you not understanding anything.

Yeah, I wish you had actually offered a citation backing up your claims.

But, it was also the fact you kept changing the text of your comment, to remove the things I was addressing. It would have been better if you'd left a record of all the things you said. Like I said, editing your comments after the fact is dishonest.

Back at the beginning of all this, you had said:

> Having Apple dependent on and paying for Microsoft infrastructure is a win for Microsoft.

In the end it turns out Apple isn't paying for Microsoft infrastructure after all.

https://www.bloomberg.com/news/articles/2024-06-12/apple-to-...


I found a non-paywall copy of the article https://www.bnnbloomberg.ca/apple-to-pay-openai-for-chatgpt-...

You are still missing the point and I think you have a persistent mental block. You are overthinking it. It's not that complicated.

The article says that Apple is partnering with OpenAI. It also says that OpenAI runs on Azure infrastructure.

Whatever they negotiate, the deal is intended to be a win-win for both sides in the long run. Obviously both sides are interested in making money. The article mentions future revenue sharing agreements and getting more users to subscribe to the paid ChatGPT.

Any increase of OpenAI/ChatGPT usage means an increased usage of (and dependency on) Microsoft/Azure infrastructure. I don't understand how this is so complicated to understand. OpenAI runs on Azure and more OpenAI usage/dependency means more Azure usage/dependency. Microsoft increases their cut of the AI market share as more Apple users use Microsoft infrastructure and of course they will make profit from that. None of these guys are doing it for charity.


OMG.

You are quite something. Have a nice day.


Fuckin hell. It's like asking for a citation that Microsoft owns Azure. Ridiculous.

OpenAI runs on Microsoft servers.

Apple partnered with OpenAI to use their service which runs on Microsoft servers.

Basic facts.


You take care now.


> To answer your question below: Apple is a customer of OpenAI. They are using OpenAI as a service. The OpenAI models won't be running in Apple data centers.

Don't move the goalposts. I asked you if you had evidence that it will run on Azure.


FYI - It's dishonest to keep changing your comment.


This comments belongs in a time capsule.

Microsoft was a breakup risk back when all that existed were computers and they had 95+% market share.


> They declined to give Elon Musk control when he offered them a billion to save the company.

On the contrary, it was the fact Elon pulled the $1B he had previously offered that put the company in jeopardy.

https://www.semafor.com/article/03/24/2023/the-secret-histor...


It's a dick move to give people false expectations when you don't have to. It's a dick move to break your word. He didn't "have" to give them the money, but he didn't have to tell them he would give it to them either.


He didn't offer them false expectations. On the contrary, he withdrew money when he saw that they had offered him false promises (of being non-profit)


Pretty sure you have the order of events backward there.

The story I heard was that Musk pulled the $1B and THEN they were forced to go profit in order to survive.

https://www.semafor.com/article/03/24/2023/the-secret-histor...


> How exactly were they entitled to his $1B donation?

They weren't. But neither is Musk entitled to anything from OpenAI and the lawsuit was BS.

He pulled his donation because he wasn't given total control, and now he is being a sore loser about it with a failed lawsuit.


Fair enough. But I would do the same if I were in his shoes just out of spite for selling out to Microsoft. Sue them for everything they are worth.


Them having to sell out to microsoft is directly Elon's fault though!

Like, you can't just directly cause the bad thing to happen with your actions, and then cry about it when someone goes to a different group for funding.

If Elon didn't want the microsoft deal to happen then he shouldn't have reneged on his funding promise just because they refused to give up complete control to him.


Elon offered funding. OpenAI declined the offer then signed a deal with Microsoft. Elon did not force them to choose Microsoft. It was simply a disagreement. After they signed up with Microsoft, Elon tried to get some of his money back. Didn't work. Too bad. Now he can move on with his life.


Well - except Elon offered the funding without the contingency of being CEO. It was when he demanded it that they went their separate ways.

> Elon did not force them to choose Microsoft.

By rescinding his offer, he did force them to make drastic changes in order to get new funding.

> Now he can move on with his life.

Are you familiar with Elon?


> It was simply a disagreement.

Ok great.

Then that means that any complaints from Elon about selling out are completely invalid, and it makes no sense for him to be mad about such a simple disagreement.

> Now he can move on with his life.

That would be wonderful.

Unfortunately you were the person arguing that it was somehow deserved for him to sue.

It is not deserved because he was the one who cause them to sell out to Microsoft.

That is the point.

The point is that you can't directly cause the supposedly bad action to happen, and then claim that you have been morally wronged when someone gets funding elsewhere.

If you think that it was merely a disagreement, then fine. Your previous arguments are invalid where you try to claim that this is some huge sellout situation, when it is directly Elons fault.


You too may be laughed out of court, then. IANAL, but your feelings aren't the law.


But he isn’t. He was just stroking his own ego. It was always bullshit.


If you read the article, in the emails published Musk acknowledged the need to start charging customers due to the high cost of service, so it’s not like the other cofounders deceived him.


why do people take anything musk says at face value? He has his motives and they aren't ever as altruistic as he implies.


This is the better question... But probably easily answered by his army of sycophantic followers who will parrot anything he says no matter how contradictory the statements may be.


Yeah. Musk is cringe but on this he's right on this. OpenAI went from a company with noble aspirations to just another sketchy big tech company at odds with the interests of the rest of society.


Yeah but the emails with Elon show that the "open" and "nonprofit" part was always a fucking a scam.




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