> Let’s examine the structure from the bottom to the top. At the bottom is OpenAI Global, the capped profit entity. The restriction on the capped profit company is that it must start to return a profit to the nonprofit after a 100x return in capital. Later-stage investors shouldn’t expect to receive such a return.<p>> Microsoft, in particular, has tied its wagon closest to OpenAI. It’s a later investor, so it cannot make the ~100x return, but it invested $10 billion dollars in OpenAI, mostly in the form of cloud computing credits. The deal’s terms are not quite disclosed, but we all understand that Microsoft has the largest economic stake in OpenAI.<p>This explains the deal between Microsoft and OpenAI. They weren't able to find investors who were satisfied with a lower return, but Microsoft wanted something other then a financial return: Access to the models. So the restriction on the return ensured a much worse deal for them as the only potential investors were big tech companies to whom access to the models is useful.<p>This entire non-profit/capped-profit structure turned out to be too clever by half. Had OpenAI been a standard business, they wouldn't have had this problem.
I think this assessment is a likely accurate story. But I disagree on the takeaway and predictions.<p>> The current structure of a non-profit board without much else in place should not be running a critically important company like OpenAI.<p>This seems insane, given the alternative of running it like your typical YC startup.<p>> I believe that the longer-term problem of safe AI is important, but you don’t do that with sudden shakeups of the founder and an exodus of half of the employees. OpenAI has been doing something special for a long time, beating the likes of better-funded research organizations like Google or Microsoft. It’s probably in everyone’s best interest to keep the team together.<p>I'm so curious about all these takes about everybody leaving if Altman is out. And it's weird to support it by talking about the long-time specialness that existed before Altman was so day-to-day involved, and that has been under tension for a long time too (see all the departures that lead to Anthropic existing). They didn't oust him out of nowhere. The schism is there and either side winning doesn't magically make for unity.<p>I have no idea which side I'd root for, but these takes that the board massively screwed up all look very one-sided, ignoring the disagreements over the massive pivot openai has undergone in recent years. I'd bet we see lots of people on the "losing" side leave openai over the next months regardless of the outcome.
One way or another the current OpenAI team will split into two teams - one headed by Sam and focused on making money and another headed by Ilya and focused on creating a safe AGI.
The real tragedy is failure on behalf of US and EU governments to regulate ML/near-agi. It shouldn't be up to Ilya to keep the public safe or to determine if there is any real danger -- at least not on his own as part of an organization that has a conflict of interest. But we don't even have basic privacy protections or social media regulation even after multiple election interferences.<p>I hate being right about this crap but OpenAI's tech will get integrated into a lot of daily tech people use and as always abuse will flourish, the 80% will suffer and the 20% will prosper.
Thoughtful analysis of dynamics in play at OpenAI that may have led to his firing and likely will result in his reinstatement.<p>Key take-aways (excerpts from article):<p>"The board made a blunder. OpenAI’s employees will likely get their CEO back by Monday, and Satya Nadella’s 10 billion dollars in Azure credits will have some vote in the future of OpenAI.<p>What’s clear is that the board is grossly mismanaged. A non-profit board should not be running a critically important company like OpenAI. Just look at the turnover and lack of transparency on re-election.<p>I think that Ilya [Sutskever] will leave OpenAI when Sam is reinstated. He has to be the player who initiated the power play. The entire current board will leave, and a new board with fewer AI safety people (sadly) will be reinstated.<p>I would not be surprised to see the OpenAI charity and capped-profit structure flipped, with a formal board at the GP that becomes the real locus of power.<p>The boardroom move was amateur and sudden. And as much as boards have technical legal power, so do the organizations they rule. It’s all a construct, and the people of OpenAI will get their way. And hopefully, a better governance structure.<p>I believe that the longer-term problem of safe AI is important, but you don’t do that with sudden shakeups of the founder and an exodus of half of the employees.<p>OpenAI has been doing something special for a long time, beating the likes of better-funded research organizations like Google or Microsoft. It’s probably in everyone’s best interest to keep the team together. "