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OpenAI's structure is a little convoluted, https://openai.com/our-structure
It's a 501c3 that owns a for-profit company. They are trying to walk a tightrope to avoid falling into thorny legal issues.
It would be very easy for Altman to do something that created legal issues he didn't expect. Moving resources between the orgs could be a problem. Doing something as simple as telling a few of the non-profit employees to help out the engineers at the for profit company is a legal minefield.
There's also another issue. 501c3s are supposed to be run in the ideal Moldbug fashion. The CEO is a local monarch and the board measures his performance and can fire him if they aren't satisfied.
However the board sometimes let power go to their heads and decide they should be running things. They fire the CEO because he's getting the glory and not doing what they say.
I am always wary of non-profits. It seems like a corporate structure that invites corruption. A for-profit company has an objective goal and shareholders it is accountable to. A non-profit with a self-perpetuating board does not.
The board members have a lot of power and are accountable only to each other. The incentive is for them to subvert the stated goals of the organization for their own benefit.
Benefiting monetarily may be difficult, but converting their power into less tangible benefits is not, especially when the goal of the non-profit is vaguely defined.
None of the board members' positions is secure. They can be voted out at any time by the other board members. Anyone brought in to support a faction can betray the other members of the faction. New factions can emerge. This all discourages long term goals. The incentive is to get in, use internal politics to gain power, and then exploit that power for personal or ideological benefit while it lasts.
I agree with this, but also remember the original mission. OpenAI got it's initial dose of mind-share, talent and OPM because it was supposed to save the world from centralising AI in the hands of a winner-take-all company.
IMHO that was a dumb strategy for achieving a valid goal from the beginning, but a straight-out for-profit company would have been completely opposite to the mission.
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There should really be such thing as nonprofit shares. You will never profit from owning them, but you may be able to replace the board of directors if they really subvert the organization's goals.
If you can sell them for a higher price than you bought them for, you can definitely profit off of owning them.
Interesting, that sounds like a much more useful version of the charity bonds Scott's been promoting these last few months. More complex too--more ownership might mean more potential for corruption. If you buy a legal advocacy nonprofit do you now get to tell it to advocate for something else?
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It's a minefield but one that is easily navigated. This isn't some novel tax-avoidance scheme; it's a thing nonprofits do. It's not particularly common, but it's still a thing. Both nonprofits and for-profits involve all kinds of challenges, and a good compliance team can handle them as long as both companies are honest about what they're trying to do. The problems really only arise if someone tries to get too cute and thinks they can take advantage of the system. Then it's easy to cross the line and find yourself owing a huge tax bill, but if you don't try to explore where the line is it's not too hard to stay out of trouble. It's like the difference between trying to avoid taxes by using tried-and-true methods and trying to avoid taxes because you have a creative interpretation of the tax code and think you can put one over on the IRS.
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