undefined | Better HN

0 pointsdragonwriter2y ago0 comments

> OpenAI shouldn't even be making a profit, as it's a 501(c)3 charity

First, the “OpenAI" whose profits are being discussed isn't a 501(c)3 charity, but a for-profit LLC (OpenAI Global, LLC) with three other organizations between it and the charity.

Second, charities and other nonprofits can make profits (surplus revenue), they just can't return revenues (but they can have for profit subsidiaries that return profit to them and other investors in certain circumstances.)

> The whole umbrella for-profit corp they formed when they became popular should be illegal

The umbrella organization is a charity. The for profit organizations (both OpenAI Global LLC that Microsoft invests in, and its immediate holding company parent which has some other investors besides the charity) are subordinate to the charity and its goals.

> and is clearly immoral.

Not sure what moral principal and analysis you are applying to reach this conclusion.

0 comments

HeavyStorm2y ago

> Not sure what moral principal and analysis you are applying to reach this conclusion.

I'm not the parent, but I think it's clear: if I'm a charity, and I have a subordinate that is for profit, then I'm not a charity. I'm working for profit, and disguising myself for the benefits of being a charity.

dragonwriterOP2y ago

Not only do I think that that's not obvious, I think its a nonsensical conclusion that really only makes sense as a general statement if you think “for profit” means “to earn revenue” rather than “to return money to an interested party” and invert the parent/subsidiary relationship.

Obviously, the for profit subsidiary ooerates for profit—and where its not a wholly owned subsidiary, it may return some profit to investors that aren't the charity—but neither the subsidiary nor the outside investors getbthe benefits of charity status.

nativeit2y ago

Profits don’t necessarily have to be used to pad the already overstuffed offshore accounts of wankers. Sometimes organizations choose to use profits to directly fund charitable works. Please wipe up after yourself if this causes your head to explode.

patmcc2y ago

(I'm going to make some assumptions, just consider the broad point, if you please)

The girl guides are a non-profit; they teach kids about outdoor stuff, community, whatever, they do good works, visit old folks, etc.

If for some legal reasons they had a subsidiary that sold cookies (and made a profit), with all the profits returned to the non-profit parent, I think that'd be ....fine? Right?

j / k navigate · click thread line to collapse