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Comment by flappyeagle | Hacker News Reader

OAI employees have no equity. They have a profit sharing right. The board is clearly not interested in profit.

MS is risk adverse in every way except for one, which is to blow up Google. They will set the world on fire to do that.

MS is risk adverse in every way except for one, which is to blow up Google.

To me this is exactly why I’m skeptical of Microsoft’s strategy here. They seem to be convinced that their success at unseating Google is assured. Meanwhile, google’s share price has barely flinched. Also, the way this has played out just feels desperate to keep the whole thing going. Wouldn’t Microsoft want at least some clarity about what actually happened by the board up and fired the CEO on the spot before doubling down to bring him into a position of power within the company?

OpenAI is doomed; in fact, it has ceased to exist; it's an empty shell, and its ressources provider is now its biggest competitor.

But I doubt MSFT will win this round.

1/ We still don't know why Sam Altman was fired; does MS know? or think they know?

2/ It will take the new team at MS a long time to recreate what they had at OpenAI (what does "MS has a perpetual license to all OpenAI IP" actually mean and entails, legally speaking?); during that time anything can happen.

Exactly. I’m very surprised nadella would take this kind of risk. It seems extremely cavalier to not investigate what happened before quickly going all in on hiring the entire team. You risk having to do a very embarrassing about face if something serious comes out and could lead to himself having to resign

Nadella isn’t getting his info from HN threads.

Yeah, but OpenAI was Microsoft’s ace the hole. Imagine if Nadella sat on his hands and waited while OpenAI burned down. In two weeks the narrative shifts from “Microsoft locked down the best AI people in the business” to “Nadella burned $10B for nothing”.

You don’t have to do a ton of diligence to know you want to keep the people you bet the farm on. If it turns out that Sam is actually a massive liability, Nadella will deal with that after this crisis passes.

When you’re in a hole stop digging

> OAI employees have no equity.

OpenAI employees have no equity? Well, then where exactly is that $86B of "existing employees' shares" coming from?

> ChatGPT creator OpenAI is in talks to sell existing employees' shares at an $86 billion valuation, Bloomberg News reported on Wednesday, citing people with knowledge of the matter.

https://www.reuters.com/technology/openai-talks-sell-shares-...

https://www.reuters.com/technology/openais-86-bln-share-sale...

A random OpenAI eng job page clearly states: "Total compensation also includes generous equity and benefits."

https://openai.com/careers/software-engineer-leverage-engine...

I believe OAI Inc employees and board members have no equity, but OAI LLC employees can have equity.

I will admit I haven’t seen an OAI contract, but have seen articles and multiple Levels.fyi posts for about $600k equity/year (worth $0 right now obviously)

So any idea how that translates into the profit sharing? They have no profit right now. Curious how employees get to that number

I have not seen any of the employee contracts so this is purely an educated guess which might be entirely wrong. There is a chart from Fortune[1] that spells out how the profit caps work. I have not looked at any of the documents myself so I am interpreting only what I have consumed. My guess is that the employee equity/contracts spell out the cap structure so perhaps the equity value is based off those caps. Assuming the profit cap for employees is correct I would assume you could not value any "equity" based off the last raise value. At best you could perhaps value the max cap available for those shares.

[1] https://fortune.com/2023/01/11/structure-openai-investment-m...

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