The artificial intelligence maker OpenAI may face a costly and inconvenient reckoning with its nonprofit origins even as its valuation recently exploded to $157 billion.
Nonprofit tax experts have been closely watching OpenAI, the maker of ChatGPT, since last November when its board ousted and rehired CEO Sam Altman. Now, some believe the company may have reached — or exceeded — the limits of its corporate structure, under which it is organized as a nonprofit whose mission is to develop artificial intelligence to benefit “all of humanity” but with for-profit subsidiaries under its control.
Jill Horwitz, a professor in law and medicine at UCLA School of Law who has studied OpenAI, said that when two sides of a joint venture between a nonprofit and a for-profit come into conflict, the charitable purpose must always win out.
“It’s the job of the board first, and then the regulators and the court, to ensure that the promise that was made to the public to pursue the charitable interest is kept,” she said.
If they are able to pull this through, I sure fucking hope they have to retroactively pay the taxes on the money that made them get that 157B$ valuation. OpenAI already does so many illegal/unethical stuff that it’s crazy they are still alive.
Just for example, when purchasing API credits, they decided that it will have an expiration date 1 year from the purchase. Which is very much illegal in most places but they do not care.
Sounds similar to how California doesn’t allow gift cards to expire, I guess? Is that the same idea?
Exactly yes, that’s how I see it at least
Yes, exactly.
They have a two year window (contractually) to get this done. I expect this will be the thing that ends them.
