I think it would be helpful for you to clarify which part of the chain you found objectionable:
- in 2015, OpenAI was founded as a Delaware nonprofit
- in 2017, OpenAI discovered the scaling laws and realized they needed far more compute (and thus money) than they had initially anticipated
- that discovery precipitated a series of negotiations between the founders on how to restructure OpenAI to raise more money for compute, ultimately resulting in Musk’s departure when the other founders would not give him control
- in 2018, OpenAI attempted to dramatically increase its fundraising despite Elon ending his contributions, but raised only $50M of its $100M goal
- in 2019, OpenAI created a capped-profit subsidiary in order to attract funding from commercial entities
- the nonprofit hired an independent assessor to value its IP, and then transferred that IP to the for-profit for fair value (around $60 million in 2019)
- the OpenAI nonprofit received a right to 100x capped return on its IP investment, or $6B, once the for-profit began making a profit. The nonprofit also received the right to the residual profit after all future investors reached their caps
- in 2019, OpenAI’s capped-profit received $1B in investment from Microsoft. OpenAI later received $2B from Microsoft in 2021 and $10B in 2023 as compute scaling continued
- Microsoft received a cap of 20x on its $1B investment, and 6x on its $2B and $10B investments, for a total of $92B target redemption
- in 2025, OpenAI’s for-profit entity recapitalized from a capped-profit entity with residuals flowing to the nonprofit to a traditional public benefit corporation with traditional equity
- in exchange for the residual (and 100x profit cap on the original $60M transfer) the nonprofit received a 26% equity stake in the for-profit. That stake is currently valued at around $200B
All of the above is from the record in Musk v. Altman, thanks to which we now have all the details. The upshot for the nonprofit is that it transferred IP worth around $60M in 2019 for rights to $6B in future profit, and then ended up with $200B in equity after the recapitalization. I see a lot of people in this thread assuming that the nonprofit no longer exists, which is not true.
The objectional part would be:
- in 2019, OpenAI created a capped-profit subsidiary in order to attract funding from commercial entities
Particularly if it creates a conflict of interest for anyone making decisions on behalf of the nonprofit
I'm curious why you think that creating a for-profit subsidiary is objectionable, since it is extremely common for large nonprofits. A good example for this forum would be Mozilla, but many more were mentioned during the trial.
Also curious what conflicts of interest you have in mind.
worse than that is the $60 million sale price, which was comically and absurdly low. Elon himself said he was willing to buy it for significantly more than that and the fact that it wasn't able to go to the highest bidder just shows that it was bullshit
Elon's purchase offer was in 2025, after the success of ChatGPT showed that OpenAI's IP (much if not most of it developed after 2019) could be commercially valuable. I think it is also debatable whether Elon's purchase offer was in good faith.
It was not clear in 2019 that OpenAI's IP would ultimately be worth billions. That was well before the current AI boom.
Wait, no, not at all. A non-profit shouldn’t have to take the highest bidder regardless. The whole _point_ of a non-profit is to act beyond purely short-term financial gains.
“Elon buying this doesn’t align with the mission” is a completely normal, reasonable, and healthy response for most non-profits.
What’s great is that we don’t need to speculate about a counter factual. He did end up building a chatbot! Whose defining differentiating feature is revenge porn.
The whole process has been a circus but I found the AG waiver rather frustrating. Nothing like negotiating with a charity to get an IOU that it’ll be charitable. https://oag.ca.gov/news/press-releases/attorney-general-bont...
The OpenAI non-profit is now one of the biggest non-profits in dollar-denominated assets. If the goal was to make the non-profit really big and well-funded then that seems on track. But not clear to me what it would do to advance its mission.