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I thought Ronan Farrow's investigate essay answered that pretty satisfactorily? https://www.newyorker.com/magazine/2026/04/13/sam-altman-may...
They were outmaneuvered, panicked, and folded.
Did they have to? No. But in the moment they thought they were on the precipice of nuking a deca-billion dollar company, their life’s greatest work, and a generational company.
It’s hard to stand against what they did. Unsurprising they couldn’t.
And why did Ilya become Sam lover after 2 days?
It’s still unclear at what happened, to make Sam unfit to be the CEO.
I think the Chinese labs have a fundamentally different viewpoint: they’re building infrastructure, and looking at it more like how a US corporation might like having some of its employees making core contributions to compiler ecosystems like LLVM/clang and so on. The payoff is down the road, partially reputational, but also having a great compiler is good for everyone in the computational business world. The rentier-finance capitalist instead wants to privatize the compiler and extract rents for access.
The thing about infrastructure is this: you don’t get a direct financial return on investment in infrastructure (think roads, which make other economic activity possible) unless you have some ridiculously corrupt system controlled by rent-collectors (which is how the US electricity grid and fiber optic backbone works). That’s all the major US LLM providers are doing: trying to collect rents on systems that were built using the global human knowledge base as inputs.
At the very least OpenAI should be releasing their older models on a steady timetable. Sure it might reduce some revenue streams but it would be good for their reputation.
I still wonder how much peer pressure was behind that. Like, what if you think Sam is a scumbag and you're glad he's gone, but people are waving this petition in your face. What would you do? It would be really bad for you if the emperor returned and you were one of the few who didn't sign it.
Also, going by this video, the first order of business for an AGI should be finding a cure for hair loss.
Whereas self-supervised, allows learning without explicit annotation of data ; but it doesn't matter if the models already trained on the entire Internet, and it's not like a game where it can come up with effectively new training data for itself?
Unsupervised is something where there is no intrinsic reward signal. In pre training, predicting the next token and seeing that it matches is a reward signal, hence it is self supervised.
Then there seemed to come a time when all they talked about was the IBM vs. Microsoft lawsuit. From then on they must have felt that they had discovered a formula, because all they ever yapped about after was insider baseball of computer companies.
I find this sort of corp. vs. corp. coverage boring, sort of like techie reality TV. Who will be voted out tonight, Debra, or Deborah...?
This was a very large apeshit $$ amount back in IBM vs Microsoft but the scale of it now in the era of e.g. OpenAI etc is beyond imagination.
There's a whole generation of people whose association with the engineering/technology side of things only happened because of their interest in the other side of things.
I too miss old Byte magazine days.
Then inevitably, tech news turned into business news.
I feel myself going insane when I think about it too much.
OpenAI will IPO soon AI probably more like a trillion.
Crazy.
What happens if you go tomorrow, downtown San Francisco, and leave a bookstore with one book without paying?
Who's missing the books? 12 million books is a rather large warehouse!
I thought HN was in the "information wants to be free" camp...
What do you think copyright does. Human culture is owned by humanity, not Disney or the New York Times.
By that token it would be illegal to go into a library, read a book, and actually remember what was in it. Except in this case the reader is a robot.
LLMs are such a fundamentally different thing that existing laws don't really make sense. Wait! Put the pitchfork down! I know, I know, stealing is stealing, and OpenAI founders are slimy. But what about derivative works? Why is a human making a hip-hop track allowed to sample, and a robot is not? Again, LLMs are such a fundamentally different thing that existing laws don't really make sense.
It's actually surprising in retrospect that nobody did this sooner. Even back in the 80s books about computers would gush about how a computer has enough memory to store an entire library's worth of books. It's just that someone finally figured out how to put an index on it.
Where I agree: given that this is basically the sum of all humanity's knowledge, the company should have been a non-profit. It was a non-profit. And then greed won.
and that murderee's mom is publically resentful against and tweets anti-sam Altman content regularly. It tells me that founder Altman has clearly not demonstrated proper empathy, sympathy or repaired what should be an emotional easy case of delivering to the mom whatever she needs for her peace (or maybe he's actually guilty of complicit in crimes).
Also, his entire diary was not in fact made public. The attorneys only quoted the parts that were relevant to the case, which pertained to OpenAI's transition from non-profit.
But it is not the point. The point is, when you take high moral ground and talk about bug problems to help humanity, and then your own diary exposes you as avaricious simpleton, the whole high moral ground crumbles. And you expose yourself as another grifter.
That’s what happened to Brockman. Although smart people could see these qualities in altman, brockman etcetera way before that happened
It’s also difficult to take people seriously if they only care about money or, in Altman’s case, power. Single minded obsessiveness about these sorts of things tends to render people intellectually dishonest by definition.
- 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.
- 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
Also curious what conflicts of interest you have in mind.
- 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
This is the egregious part. Before full for profit conversion it was worth $300B. Then after $850B.
A true fiduciary would set an auction and that would set the price for for profit valuation. And then all existing investors would keep the value of their positions, but would be diluted because capped profit is worth much less than unlimited profit and residuals.
But, they sold it to themselves for a bargain basement price. The nonprofit lost out on $300B or so. Maybe more.
It was not an arm’s length transaction. It was self-dealing.
Appreciated!
https://en.wikipedia.org/wiki/IKEA_Foundation
IRS requires nonprofits to pay taxes on “unrelated business income” and spinning it off to a for-profit subsidiary is the least risky way of managing that revenue.
Not everything is a business.
OpenAI wasn’t, until it was.
Other than researchers, nobody from big tech would ever see themselves wanting to work at a charity / non-profit. The moment the VCs came into the picture then all the grifters poured in and AGI meant IPO.
> You can just use a favorable structure until it’s time to enrich yourself.
Maybe that diary was made out of teflon.
Are you saying researchers are less interested in quality of life than other people? If this was true, frontier labs wouldn’t need to offer 7 digit compensation packages to their researchers.
Western countries have been utterly strangled by nonprofits. Governments fund them with tax money in order to lobby themselves for legislation that financially benefits individuals in government and their donors. Obama even expanded the rules in the US to allow the government to unconstitutionally fund religious groups to accomplish functions that belong in government.
They should all be either reformed so that their internal bylaws and compensation are strictly regulated or probably preferably, they should simply be destroyed. If you only pay taxes on your profits (and we get rid of legal vehicles to hide profits) and your employees are obligated to pay taxes on their incomes, there's no need for a nonprofit status. If nonprofits want to engage in business (religions included), let them pay taxes. If they engage in charity, they won't have anything to tax.
To expand, there are two major problems with nonprofits in Western nations these days:
1. Governments use them as a way to do things that they themselves are not allowed to do ("it's private charities that do this!", ignoring the fact that the charities get >90% of their revenue from government grants)
2. Like you mentioned, the government grants to nonprofit back to politicians' campaign funds pipeline. Utterly egregious.
> Obama even expanded the rules in the US to allow the government to unconstitutionally fund religious groups to accomplish functions that belong in government
I wasn't aware of this being a big concern; more the other way around, like in my point 1.
Another reform I would make would be around independent governance and removing donor control of charities to reduce the number of sham Rich Guy foundations.
This one is tough. I mean, look at the Clinton Foundation. One reason to believe that $1 there is more effective than somewhere else is _because_ the Clinton’s are closely involved.
Of course, you get massive donations there because people want to influence the Clintons and/or _through_ the Clintons. Would those people / states donate otherwise? Would they donate to _better_ organizations? Maybe! Maybe not!
* Also I’m not saying the Clinton Foundation is more/less effective. You’re almost certainly better donating to GiveDirectly, but it’s not on its face ridiculous to think that they, specifically, could effect a _different_ type of change than others would have access to/influence over.
It should also not surprise you that the Epstein files have not been released.
Everything is possible and not possible in a corrupted system.
The board didnt have the maturity to fix that.
Or do I forget that this guy sleeps with an Ayn Rand doll tucked under his arms?
the market has spoken, for coding they are the best.
I’m willing to discount what they did almost a decade ago (“Attention is All You Need” was 2017) in an industry that moves this quickly. The execution of an Anthropic matters more now.
The founders of OpenAI naively^ thought "this will make sure that we don't have too much power if we succeed"
But it didn't work. What lesson should we learn?^^
^ please grant this for the sake of argument
^^ I have other models that I prefer to explain what happened, but I think this one is the most interesting
From my point of view they are yet another big tech bros company.
> Greg explains how the original Napa offsite produced the three-step technical plan OpenAI has followed for a decade and the real reason OpenAI had to abandon its pure nonprofit structure
What was the technical plan and what was the "real reason" they couldn't achieve their original goals?
"1. Solve reinforcement learning
2. Solve unsupervised learning
3. Gradually learn more complicated 'things'"
That three point list is verbatim the extent of the technical plan mentioned.
> what was the "real reason" they couldn't achieve their original goals?
Paraphrasing, "we needed more money for compute and didn't think we could get enough as a non-profit". Brockman's diary might be a stronger indicator of the real real reason, though.
I imagine if they stayed nonprofit, they would’ve survived, but not convinced investors to give them enough $$$ and datacenters to stay the most popular (above Google).
I think the non-profit has around 25% ownership of something that is around a trillion dollars of on-paper money.
I guess we will see what things are still worth when the crazy days come to an end.
And one things started to become real, they realized the financing potential of the thing, that they were seated on a gold mine and would be stupid of them to create that and not profit much more of it.
Because they were still downloading from Anna's Archive and the lawyers were in panic?
2. solve unsupervised learning.
3. gradually tackle more complicated things.
> what was the "real reason" they couldn't achieve their original goals?
I assume this is referring to why they gave up being a non-profit. The answer is that they needed more money.
> I assume this is referring to why they gave up being a non-profit. The answer is that they needed more money.
Ugh, that was more boring than even I expected, thanks a lot for saving me the time though, seems avoiding watching the full thing was worth it.
isn't it still an odd choice for a nonprofit? it's hard to imagine a world without OpenAI and ChatGPT now, but at some point they decided being the best is most important. and presumably most profitable, since why just need a little more money?
I know HN is built around mostly not reading the articles linked but how about you click on the link and surprise, there is already exactly another link providing what you're asking for.
Whatever AGI is, it "AGI" is not glueing a load of text prediction machines together.
K don't think it would be that simple either, but for now we simply don't know.
I would like to think that what I consider my intelligence will always be distinguishable from a cleverly built harness wrapped around text prediction, but I can't say for sure that's guaranteed.
The latest efforts like agents are clearly showing the limitations and are nowhere near AGI.
We’ve now reached the buzzwords and bullshit stage of the bubble where they cast around for problems shaped like the solution.
https://medium.com/@vishalmisra/shannon-got-ai-this-far-kolm...
This article explains what's missing in terms of two kinds of complexity that oppose: Shannon complexity vs. Kolmogorov complexity.
It introduces the opposition by an example of driving the value of pi as decimal number, which has no pattern and high complexity, and a formula for deriving pi that does have a pattern with low complexity, then observing that mind can work from the patternless high-complexity back to the patterned low-complexity without prior examples, while AI can't.
LLMs encode and retrieve patterns in the training data, and doing so can connect data to the terminology of known principle, but mind can observe inconsistencies in data and to reason from first principles to resolve the inconsistency.
The distinction between these two modes can seem blurry as AI can traverse the patterns of the known in ways that are extraordinarily revealing, but it's not structured to reason about the unknown.
Inference is not sufficient for reason.
For example, a conventional algorithm can search for patterns in text at a scale many orders of magnitude beyond a mind's capacity, and this can be very revealing, but to do so this algorithm need not read the text with comprehension.
Regarding the question: can genAI be enhanced to reason? The answer is assumed to be "no", due to the categorical opposition of the two kinds of complexity and the lack of understanding of structures within genAI to handle the reasoning.
Read the article, which includes other examples including a jump from Newtonian to Einstein physics in the history of astronomy, and a noodling on how to talk about the edge of the unknowable in AI.
Using that as an argument to say we don't have AGI doesn't really make sense.
Regardless of whether we do or don't have AGI, until I actually see the economy-ending job losses, I won't believe it.