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Comment by toth | Hacker News Reader

The analysis in the article is mostly very good, but I object to this observation

`The biggest loss of all, though, is a necessary one: the myth that anything but a for-profit corporation is the right way to organize a company.`

I don't see how anything that happened this weekend leads to this conclusion. Yes, it seems likely that the board's actions will result in an OpenAI with much smaller revenue and consumer traction. But the whole reason for setting up OpenAI as a non-profit was precisely ensuring that those were not the overriding goals of the company.

The only conclusion that seems warranted is that "the myth that anything but a for-profit corporation is the right way to organize a for-profit company.", but that is pretty obvious.

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It means that those 'organisations' can never scale, and therefore make the titanic impacts on society they hoped to have.

No investors will touch these non-profits with a 10 foot pole now. An unaccountable board that can lead the majority of the company and investors to revolt is radioactive for investors.

It proves that the shares=votes, standard corporate structure is the only way to organize mega scale organizations.

OpenAI will keep its goals, but it'll simply accomplish nothing. It'll probably devolve into some niche lab with no resources or GPUs to do anything significant.

Right! The Wikimedia Foundation is dead in the water, and everyone except Jimmy knows it. If only it could raise hundreds of millions in capital from investors then they could actually start delivering value and get significant market share.

Pithy response but poor comparison -- Wikipedia's startup costs were in, what, the tens of thousands of dollars? Less?

OAI is burning billions in compute/salary to create their thing, and will spend billions more before truly massive value to society could ever be wrought.

I can't think of a nonprofit structure that has ever effectively allocated that much capital aside from, like, a government.

The parent criticism was that non-profits cannot scale.

Would you say Wikipedia has had a significant impact on society?

Of course it has. Wikipedia is the first (and only) truly global source of knowledge, to a depth no other encyclopedia has ever covered before - and with an unmatched capability to react to current events.

For-profit vs. non-profit is an increasingly meaningless distinction in today's business/legal environment. It seems like more of a marketing ploy than anything else. For example, one can set up a 'socially responsible do-gooder' non-profit with the left hand, and a for-profit corporation with the right hand, and then funnel all the money that goes into the non-profit into the for-profit by making that the sole supplier to the non-profit, thus avoiding many taxes and generating robust profits. These schemes are legion - there are hundreds of examples if you go looking.

The real issue with LLMs is open-source vs. proprietary.

Hundreds of examples? Can you name one?

As someone who works at a non-profit that partners with various for-profits, I'm skeptical that the IRS would allow such sort of large-scale tax fraud to happen.

> "In this scenario, I set up my non-profit school-- and then I hire a profitable management company to run the school for me. The examples of this dodge are nearly endless... consider North Carolina businessman Baker Mitchell, who set up some non-profit charter schools and promptly had them buy and lease everything - from desks to computers to teacher training to the buildings and the land - from companies belonging to Baker Mitchell."

https://curmudgucation.blogspot.com/2016/07/for-hrc-profit-v...

As far as the IRS, this may be entirely legal due to tax loopholes pushed through by lobbyists and bought politicians, or it may take so many IRS resources to unravel that it tends to go ignored.

This non-profit structure means that 4 people can decide to do whatever they want, with no consequences, putting 100s of jobs in danger, 1000s of companies futures on the line and disrupting millions of people who rely on the service.

Because they had a difference in opinion about a devday presentation...?

Just confusing to me why so many people are thinking the board is so altruistic here. That kind of unchecked power is insane to me.

If Altman goes back it could potentially salvage the model he helped create - maybe there needed to be some mechanisms in place to validate decisions like firing the CEO. This drama was made all the more intense because no one still really knows why they made the call. As a non-profit, some level of transparency for decisions like this seems like a super reasonable demand.

> I don't see how anything that happened this weekend leads to this conclusion.

They seem to need additional investments, but their goals are not aligned with most of their would-be investors.

If their goal really is the 'safe' development of AI, they are now in an objectively weaker position to pursue that goal, even if the actions of this weekend were otherwise justified.

I'm a non-native speaker and this sentence makes my head hurt. Feels like a double negative.

Is the loss of the myth meaning it is not a myth anymore (so reality) or that a for-profit is not the only right way?

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