This assumes that the nonprofit would have achieved AGI. That's doubtful - they would have been outcompeted by companies that can make a profit.
I assume you'll say - then why haven't they been outcompeted already? And it's obviously because of the funding they received earlier this year that was contingent on becoming an uncapped for profit entity. If they didn't have access to those resources, they would already be behind.
I'll add to your thread and say that if we are including the USSR, we should include the actual USSR during its heyday. Stalin siezed all of the aggricultural businesses in the Ukraine and subsequently starved them to death. That's a pretty big theft from a percentage point of view.
Not to mention Kazakhstan where 1/3rd of the population died of starvation due to the same Stalin/Lysenko collectivization that was inflicted on Ukraine. Kazakhstan was the second largest wheat producer in the old Soviet Union.
Ukraine had more people die but Kazakhstan had a higher percentage.
One way to analyze this would be: out of all the billions invested into openAI, how much was invested under profit motive vs as a nonprofit contribution.
GPT-5 estimates it at 99 percent (51 billion) profit seeking vs about 150 million non profit with further profit seeking investments coming.
So looking at it big picture it looks like a good deal for the PBC portion. They get 26 percent of that profit seeking money and their stake continues to rise in nominal value.
So it's either the largest theft or largest charitable contribution in history.
I want to defer to zvi here with his personal experience in finance but going by "who has actual money on the table" it doesn't look like theft, explaining why California and Delaware signed off.
It remains unclear to me why the old NFP Board members left. Presumably there is material information that's not public, because otherwise it never made sense.
I am not a corporate governance expert, but to me this reads as though the OpenAI corporation is in practice not allowed to give up any of its class N stock. 21 days review as I read it here basically means, “if you do this we will sue you as you will almost certainly not be acting in the public good.”
“17. The NFP will provide at least 21 days' prior written notice to the Attorney General before consenting to: (a) a change of control of the PBC; (b) any change to the PBC mission as set out in the PBC Charter; and (c) any amendment to the PBC Charter that would remove the NFP's sole right, as holder of the Class N shares, to appoint PBC directors or otherwise reduces in any material respect the rights of the Class N shares.”
IF OpenAI can't become a normal company making its past and future investors lots of money, it'll be worth less than the 26% anyway.
All the investments between the sacking of Sam Altman up to today were basically conditional on it ending up as some sort of normal company.
We can quibble about the percentages, I guess. But my superficial impression is that without serious governance change, OpenAI would've been half doomed. A walking dead which no normal investor would be willing to get involved with.
I agree, I think that’s the major flaw in Zvi’s arguments. Being for profit creates value (eg SBC pushes employees to work harder, equity investors are willing to invest a lot upfront). That wouldn’t have happened if everyone had thought OpenAI would remain a non profit.
I think the AI doom crew - as much as I respect the gang in many ways - are quite blinded and biased in multiple ways but their anger towards Sam evading the doomers attempts at destroying him and OpenAI. (Destroying in my feeling about had the coup worked! One can disagree).
Because forming a view regarding the complicated decision of OpenAI conversion involves very many assessments on 10+ parts of the assessment process, small biases on multiple steps are enough to convert a disagreement about a company restructuring to "biggest heist in history".
Rationalists aren't immune to the brain weaknesses. Not am I
Can you explain why it is a theft and not just a large amount of money at stake?
There are pros and cons to different corporate structures, and most of them at least theoretically make sense under some circumstances. Structures that are more profit-oriented will tend to be focused on customer value, because you have to make something customers value in order to increase sales.
Separate from the future is the past. If I were asked who in today's world deserves oodles of reward for already helping out humanity, it's gotta be people who brought modern AI into the world.
IMO this is a big Ponzi scheme. Kiting "future billion $ contracts" that don't even need to materialize to pump up fake evaluations. I smelled a scam from day 1, and Alman will do anything to grab money. This is theft from the point of view that many people will lose real $ when this collapses, and Alman will be a trillionaire.
ahem.... largest? colonial history? slavery?
If OpenAI achieves AGI, and if the AGI is anything near as significant as Zvi thinks it will be, yes this would be even larger than those huge thefts.
This assumes that the nonprofit would have achieved AGI. That's doubtful - they would have been outcompeted by companies that can make a profit.
I assume you'll say - then why haven't they been outcompeted already? And it's obviously because of the funding they received earlier this year that was contingent on becoming an uncapped for profit entity. If they didn't have access to those resources, they would already be behind.
Totally agree it's an "if." As Zvi says in the headline, it's only "potentially" the largest theft. And myself, I seriously doubt it too.
The fact that you need to bring out those examples to counter his point illustrates his point marvelously.
Biggest theft? Hmm. Got a ways to go to claim that title IMHO.
#1) East India Company / Opium Wars looting of China for a century!
#2) Covid Vaccine scam (ongoing).
#3) Looting of Russia in the 1990's.
If this OpenAI scam can break into the top 3 I'd be impressed. LOL.
I'll add to your thread and say that if we are including the USSR, we should include the actual USSR during its heyday. Stalin siezed all of the aggricultural businesses in the Ukraine and subsequently starved them to death. That's a pretty big theft from a percentage point of view.
Not to mention Kazakhstan where 1/3rd of the population died of starvation due to the same Stalin/Lysenko collectivization that was inflicted on Ukraine. Kazakhstan was the second largest wheat producer in the old Soviet Union.
Ukraine had more people die but Kazakhstan had a higher percentage.
I did not know.
One way to analyze this would be: out of all the billions invested into openAI, how much was invested under profit motive vs as a nonprofit contribution.
GPT-5 estimates it at 99 percent (51 billion) profit seeking vs about 150 million non profit with further profit seeking investments coming.
So looking at it big picture it looks like a good deal for the PBC portion. They get 26 percent of that profit seeking money and their stake continues to rise in nominal value.
So it's either the largest theft or largest charitable contribution in history.
I want to defer to zvi here with his personal experience in finance but going by "who has actual money on the table" it doesn't look like theft, explaining why California and Delaware signed off.
It remains unclear to me why the old NFP Board members left. Presumably there is material information that's not public, because otherwise it never made sense.
I am not a corporate governance expert, but to me this reads as though the OpenAI corporation is in practice not allowed to give up any of its class N stock. 21 days review as I read it here basically means, “if you do this we will sue you as you will almost certainly not be acting in the public good.”
“17. The NFP will provide at least 21 days' prior written notice to the Attorney General before consenting to: (a) a change of control of the PBC; (b) any change to the PBC mission as set out in the PBC Charter; and (c) any amendment to the PBC Charter that would remove the NFP's sole right, as holder of the Class N shares, to appoint PBC directors or otherwise reduces in any material respect the rights of the Class N shares.”
IF OpenAI can't become a normal company making its past and future investors lots of money, it'll be worth less than the 26% anyway.
All the investments between the sacking of Sam Altman up to today were basically conditional on it ending up as some sort of normal company.
We can quibble about the percentages, I guess. But my superficial impression is that without serious governance change, OpenAI would've been half doomed. A walking dead which no normal investor would be willing to get involved with.
I agree, I think that’s the major flaw in Zvi’s arguments. Being for profit creates value (eg SBC pushes employees to work harder, equity investors are willing to invest a lot upfront). That wouldn’t have happened if everyone had thought OpenAI would remain a non profit.
I think the AI doom crew - as much as I respect the gang in many ways - are quite blinded and biased in multiple ways but their anger towards Sam evading the doomers attempts at destroying him and OpenAI. (Destroying in my feeling about had the coup worked! One can disagree).
Because forming a view regarding the complicated decision of OpenAI conversion involves very many assessments on 10+ parts of the assessment process, small biases on multiple steps are enough to convert a disagreement about a company restructuring to "biggest heist in history".
Rationalists aren't immune to the brain weaknesses. Not am I
Can you explain why it is a theft and not just a large amount of money at stake?
There are pros and cons to different corporate structures, and most of them at least theoretically make sense under some circumstances. Structures that are more profit-oriented will tend to be focused on customer value, because you have to make something customers value in order to increase sales.
Separate from the future is the past. If I were asked who in today's world deserves oodles of reward for already helping out humanity, it's gotta be people who brought modern AI into the world.
Podcast episode for this post:
https://open.substack.com/pub/dwatvpodcast/p/openai-moves-to-complete-potentially
"...in which case all but a fraction is returned to the world."
Apparently the fraction he had in mind was close to 1.
IMO this is a big Ponzi scheme. Kiting "future billion $ contracts" that don't even need to materialize to pump up fake evaluations. I smelled a scam from day 1, and Alman will do anything to grab money. This is theft from the point of view that many people will lose real $ when this collapses, and Alman will be a trillionaire.
Thank you for the great research and summary for us! Really appreciated!