Sam Altman owns OpenAI's venture capital fund | Hacker News Reader

Sam Altman owns OpenAI's venture capital fund

axios.com

253 pointschoppaface82 comments

> "We wanted to get started quickly and the easiest way to do that due to our structure was to put it in Sam's name," an OpenAI spokesperson tells Axios. "We have always intended for this to be temporary."

Is some journalist mapping out all the financials, governance structures, and history of OpenAI, and can explain to the rest of us what it all means?

Maybe especially interesting would be determining the intentions of each of the various founders and funders.

(I have different snap reactions to some individual and company names involved, based on other history, but know little of their intentions with OpenAI specifically.)

Well, understanding intentions in few words:

Andrej Karpathy was the smart and nice guy of OpenAI, and he is not there anymore.

My own snap assessments would be somewhat different. I'd like to understand the reality in detail, and with much more confidence than my own gut.

Matt Levine has tried to in his own inimitable style:

https://www.bloomberg.com/opinion/articles/2023-11-20/who-co...

https://www.bloomberg.com/opinion/articles/2023-12-11/openai...

(https://archive.is/drJgZ and https://archive.is/cqqY4 respectively)

Now I want ChatLevine, an AI filter that turns everything into Matt Levine's writing style.

Gary Marcus was trying to bring it up a while ago: https://x.com/GaryMarcus/status/1731375497458987351?s=20

Even a broken clock is right twice a day.

Barring some kind of life-changing event (religious conversion, serious accident, birth of a child, etc.), people tend to continue on the path they were on before.

I don't know enough about Altman's previous business dealings to judge, but is this part of a pattern of behavior?

I think the main pattern of behaviour here is that someone who realized the idealists around him believed he was switching to a profit model and licensing their tech to Microsoft out of philanthropic intent ended up assuming that they (and others) would be dumb enough to swallow the idea a $175m venture capital fund quietly spun off what is now the world's most-hyped company gave him full control and all the profits out of lack of resource to figure out any other arrangements...

I am having tremendous difficulty parsing this sentence.

I removed a superfluous word, but it still isn't winning a Pulitzer Prize :-)

Maybe break it into a few smaller sentences? :)

Your comment is impossible to read because of some severe grammar mistakes, lack of punctuation and the fact that it is one long sentence.

Here is the corrected version:

Someone realized the idealists around him truly believed that he was switching to a for profit model out of philanthropic intent.

That same person assumed, that the idealists would be dumb enough to let him quietly spin off a venture capital fund off the world's most hyped company.

They let him get away with it (my interpretation), by giving him full control and all the profits, out of lack of resources to figure out any other arrangement.

Who though?

> I don't know enough about Altman's previous business dealings to judge

He's involved in the eye scanning shitcoin 'Worldcoin'.[0] Personally, I assume anyone involved in crypto has suspicious motives at best.

[0] https://en.wikipedia.org/wiki/Worldcoin

On the contrary, nothing makes your motives more transparent :-)

>I don't know enough about Altman's previous business dealings to judge

Well, Paul had to fire Sam from Y Combinator, so there's that.

Scam Altman doing what he does best.

Please don't post unsubstantive comments.

You may not owe $celebrity or $billionaire better, but you owe this community better if you're participating in it.

https://news.ycombinator.com/newsguidelines.html

Amen

I find it interesting they keep saying “small investment”. What does that mean? By all accounts Andy Bechtolsheim made a “small investment” in Google, and it turned him into a billionaire. Even back then $100k was a rounding error in funding for a startup.

I don’t care if someone thinks the amount invested was small, I care how much equity that investment resulted in.

WeWork vibes

Indeed indeed.

WeAI would arguably be a much better name

What of it? The guy is allowed to own stuff.

And at 175m commit it isn't even that big of a fund.

Also not entirely convinced the author knows what a fund is.

>It always had outside limited partners

>it's legally owned by Altman.

He controls the GP but there are at least 14 LPs. That's not what I'd call "own".

https://www.sec.gov/Archives/edgar/data/1877240/000187724023...

I can't even find any evidence to back the claim the Altman owns it... he is listed in that SEC filing you linked to lists him as the manager of the general partner. As CEO of OpenAI, it is exactly what I would expect to see on such a filing. The Axios article provides no source at all.

It appears to be a big nothing-sandwich or maybe some sort of conspiracy to manufacture a conspiracy or something...

During a meeting with Neumann, he scribbled out a vision for a company worth $10 trillion."

||Sam Altman’s $7 Trillion ‘Moonshot’

"Adam also owned the rights to the 'We’ trademark, which the firm decided they must own and paid the founder/CEO $US5.9 million for the rights.

||Sam Altman owns OpenAI's venture capital fund

not saying this is apples to apples, but go on...

Not even apple to oranges....that is an apple to automobiles comparison.

Sam does deals that would make Dennis Kozlowski blush.

Can't make money in your non-profit? Just self-deal and have another business that you can make money on!

Often illegal to do this too egregiously.

Hasn't stopped anyone before.

I'm still waiting for Elon to get reamed over SolarCity. Oh wait, he never will, and will strong arm the company into giving him another 12% of TSLA.

SolarCity? Tsla saved them when he rolled them into Tesla. Anyone who picked up TSLA shares from that purchase did significantly better than they ever would have as solarcity.

He might be talking about the subsidy deal with NYS that imploded.

If the board allows it, why should the public care? Aren't self imploding companies good for the economy? It allows newer ones to fulfill their place.

It's the oldest trick in the book.

The nonprofit doesn't pay taxes. Nonprofit buys it's supplies from a for-profit. You mark up the supplies and buy them from the for-profit.

Organize costs so that the for-profit incurs all the costs and the non-profit gets most of the revenue.

This is almost certainly a form of securities fraud, however.

That only matters if the government has the ability to prosecute it successfully, but I would posit that most fraud does not even get investigated.

This is how IKEA has been operating forever.

https://www.investopedia.com/articles/investing/012216/how-i....

Perhaps, but let’s not assume that what a wealthy Nazi sympathizer bribed his way into doing in postwar Europe is a repeatably legal arrangement.

What exactly would that accomplish? The For Profit would have to pay a ton of taxes on all that revenue if the non-profit incurred all the costs!

Net revenue minus taxes is profit.

Could the for-profit be located in a different jurisdiction where there's no company tax (or something along similar lines)?

a)That's not the case for openAI

b)If you do that, why have the not-for-profit incurring costs? Just put it all where there's no company tax.

That would strictly result in paying more tax than if you just had the for profit and put all the costs and revenues in there.

Parallels to Twitter pre-Musk. Altman has been controversial since his days (literally) as Reddit CEO. Yishan had some thoughts on X about the shake up at OpenAI and how they relate to Sam (and Microsoft).

The capital class prefers hungry young sociopaths with flexible morals. I don't know Sam, so I can't say that he's a sociopath, but he certainly is hungry and the morals seem flexible.

Well, there was also the opaque manner in which he overnight departed YC, too.

What’s this about him being CEO of Reddit? I’m not seeing that anywhere.

Yishan: https://old.reddit.com/r/AskReddit/comments/3cs78i/whats_the...

Sam Altman: https://old.reddit.com/r/AskReddit/comments/3cs78i/whats_the...

I'm starting to get the feeling that there might be shenanigans going on around Sam Altman.

Next thing you know, we're going to find out that his name isn't even Sam Altman, OpenAI isn't open, and all the workers have been replaced with robots a la Disney's Black Hole movie from the 1980s.

I don’t know if I should be telling you this, but Sam Altman’s real name is Astronaut George Santos.

THE George Santos, who recently quarterbacked the Super Bowl winning KC Chiefs? Damn. That guy gets around.

Any relation to a Mike Dexter?

Read this Reddit thread from 8-years ago.

https://old.reddit.com/r/AskReddit/comments/3cs78i/whats_the...

Sam even acknowledges past shenanigans.

When did Conde Nast/Advance Publications lose majority shareholder status for Reddit? That comment discusses it happening in 2015, but I've seen mixed citations for later dates, some claiming it still holds a majority stake.

2017: https://www.vox.com/2017/7/31/16037126/reddit-funding-200-mi...

2023: https://www.cnbc.com/2023/06/01/reddit-eyeing-ipo-charge-mil...

2024: https://www.forbes.com/sites/tylerroush/2024/01/18/reddit-pl...

On the other hand, Wikipedia claims without source that AP has a 30% stake in Reddit: https://en.wikipedia.org/wiki/Advance_Publications

Don't forget the ability to spin past successes that were simply stumbled upon into a crafty narrative of where they planned the whole thing.

Anonymous source close to the OpenAI situation, according to the Financial Times: "His superpower is getting people onside, shaping narratives, pushing situations into the shape that work for him."

Paul Graham: "Sam is extremely good at becoming powerful."

Yeah, trying to read between the lines of what pg has said/written about sama (and obviously I'm just some rando bullshitting, so what do I know) it seems like he is genuinely in awe of a lot of Sam's capabilities, but he also has some real concerns about his ethics (e.g. when the report came out relatively recently that Sam was fired as YCom president).

Given this background, while I might normally take the comment that "We wanted to get started quickly and the easiest way to do that due to our structure was to put it in Sam's name" at face value, there has been enough past shenanigans that I don't buy that.

Well there is the whole debacle last year at openAI. Im starting to get those weird vibes and his history is a bit spotty.

The YCombinator application that pg created had a question asking CEOs to tell a story about how they unethical they achieved a goal. He called it "bring naughty" and "hacking a system". Hiring sama wasn't a a surprise twist. sama was who pg knew he wanted.

> asking CEOs to tell a story about how they unethical they achieved a goal.

I know what you're talking about, and in my opinion that's a gross misrepresentation (that, unfortunately, I've often seen repeated). I think people can judge the actual statement on its own merits, from paulgraham.com/founders.html:

> 4. Naughtiness

> Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter. This quality may be redundant though; it may be implied by imagination.

> Sam Altman of Loopt is one of the most successful alumni, so we asked him what question we could put on the Y Combinator application that would help us discover more people like him. He said to ask about a time when they'd hacked something to their advantage—hacked in the sense of beating the system, not breaking into computers. It has become one of the questions we pay most attention to when judging applications.

It really is impressive how some people seem to be able to embed themselves so well in an industry. Not many people have the drive to pull it off, even fewer have the circumstances.

Is he himself the 1 person unicorn

https://fortune.com/2024/02/04/sam-altman-one-person-unicorn...?

Next thing to comes out is that Sam Altman never headed Y Combinator.

Every story about OpenAI is another illustration of the benefit of the standard for-profit and the way it aligns incentives.

or alternatively an illustration that the not-for-profit model is horrendously improperly regulated. what is the point of not-for-profit, if it immediately becomes for-profit as soon as it has anything of value?

Now it's clear why he owns no OpenAI stock. I'm sensing a rug pull.

Isn't that the FTX guy? Didn't think they would ever let him anywhere close to finance again.

Sam Altman != Sam Bankman

One of them is a young man with questionable ethics who pretended to be altruistic to become wildly rich. The other is involved in dodgy crypto stuff.

Hm… You got me thinking, twice. It works both ways.

A distinction without a difference.

They are both involved in dodgy cryptocurrency[1] stuff.

https://en.wikipedia.org/wiki/Worldcoin

[1]: Don't let them steal the shorthand for cryptography from us.

I think it's too late for that, my friend. crypto meaning bitcoin is a word that even the idiots have come to know. in today's blessed society, no intellectual subject will supplant that

Congratulations to Sam Altman, great work owning most of ChatGPT and firing people against you! Much to learn from you!

Scam Altman strikes again

Please don't.

yet people around here have their heads so far up the ass of tech utopia that they worship this fool.

Not sure 'fool' means what you think it means. This guy is anything but a fool.

It's just a nice way of saying "motherfucker" I can't imagine you don't understand this.

It depends what definition you use. According to Webster's a fool is "a cold dessert of pureed fruit mixed with whipped cream or custard."

Ok, but please don't post like this to Hacker News (irrespective of topic or person). We're trying for something else here.

https://news.ycombinator.com/newsguidelines.html

Seems like a great way incentivize the CEO to prioritize developer experience. Maybe Google could follow a similar incentive plan to improve Gemini developer experience.

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