It is being restructured to no longer be a nonprofit, but a for-benefit corporation instead. That is why California's approval was required (and IMO is just as corrupt as it sounds).
It is being restructured to no longer be a nonprofit, but a for-benefit corporation instead. That is why California's approval was required (and IMO is just as corrupt as it sounds).
"OpenAI and Microsoft have made their next move in their attempt to expropriate the OpenAI nonprofit and pull off one of the largest thefts in human history."
https://thezvi.substack.com/p/ai-134-if-anyone-reads-it?open...
But aren't non profits a federal thing with rules dictated by the IRS? Why is California involved?
Corporate law is overwhelmingly state law. Every federally tax exempt entity is a state (or foreign) corporation or other kind of entity, and states (or foreign governments) impose rules on corporations registered in their borders.
Plus, many states levy their own corporate taxes. A nonprofit corporation needs to secure tax-exempt status from states as well as the federal government. This is a necessary implication of America's dual-sovereignty system.
Because charities are also regulated by states as are all corporations. There is no federal corporate governance statute.
> aren't non profits a federal thing with rules dictated by the IRS? Why is California involved?
Most states incorporate federal rules for their own exemptions for charities and non-profits. California treating OpenAI to date as a non-profit has revenue implications for Sacramento.
Corporations and nonprofits are a state regulated thing. The IRS only gets involved to approve whether donations are federally tax deductible and things like that, which apply to federal tax laws only.
The Usa is divided into states, each with their own legal jurisdictions. Businesses tend to pay taxes to their state. OpenAI is headquartered in San Francisco, California.
So they avoid billions of tax on nonprofit status, then magically get to keep it all when they are for-benefit? How about no, fuck you, dissolve?
I mean, OpenAI has never been profitable. If anything, they are insanely unprofitable.
The more interesting question is will they be able to deduct those past losses (while they were "nonprofit") from their future income in the same way they could if they had been a normal corporation all along.