alt Hacker NewsI don’t get what’s the point of non-profits if you can IPO them. How does that make any sense?
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See: https://www.axios.com/2023/11/18/how-openai-board-is-structu... for the OpenAI Structure.
1) In order to fund research - this stuff costs 10s of billions of dollars - everyone, from Ilya, to Elon, to Sam - all agreed that they would require a profit-arm to raise money. Nobody was going to sponsor that 10s of billions of dollars to a non-profit.
2) The non profit is still there - and controls the commercial element.
The nonprofit (OpenAI Foundation) owns ~26% of the for-profit, plus some extra warrants.
The for-profit (OpenAI Group PBC) is what's filing the S-1 Draft.
The OpenAI Foundation also exclusively appoints the board of the OpenAI Group PBC and can replace directors at any time.
https://openai.com/our-structure/
(I work at OpenAI, but I am not a lawyer and am not speaking on behalf of OpenAI - just sharing my personal understanding.)
The corporation selling shares is just primarily owned by the non profit
The corporation selling shares is subject to normal corporate tax regime
The real answer to your question is that non profits can own shares, and there is no legal difference between passive investment of other publicly traded companies and highly consolidated shares of a private company. In the US it is seen as merely happenstance that we have such a liquid market where the shares themselves can rapidly change in value and create profits, but there is nothing controversial about that.
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There is no point, it’s just government sanctioned virtue signaling
They're IPOing a commercial subsidiary of OpenAI so that it can donate even more money to the parent nonprofit.
(Actually the subsidiary is everything and the nonprofit is a do-nothing fig leaf but the IRS and Congress seem to not care enough to stop them.)