I wonder if the government or taxpayers have a case to bring regarding that.
The attorneys general of California and Delaware could challenge that 2019 IP transfer if they so wished on behalf of the public.
> Early Angels (Reid Hoffman, Peter Thiel, and others): Approximately $10 million invested, current value $1.4 billion. That corresponds to a return of around 140x.
The issue is that they did R&D as a charity, donations to which are tax deductible, there may also be other benefits to being a charity during R&D but that’s a big one, then once the thing works, setup a for profit, sell ip at “fair value”, get some investment, then things are ready for business.
I read there’s no statute of limitations on a tax issue like this, so I guess it might be hanging over them indefinitely.
I’m not a big taxation and government fan, they’d probably just waste the money anyways. It does seem unfair OpenAI gets to use this loophole though, unless all companies can make their R&D investment tax deductible, and get any other benefits of this setup.
There is no loophole here.
If it had been a for-profit company contributing assets to another for-profit company, the transaction would not have had any different tax consequence.
(This is just a thought IANAL)
Only people who are pretending to be confused are people for whom it's in their interest to be confused.
They created a non-profit with the intention of launching AI to make sure that it would stay in the public trust, and then once it became really valuable, they spirited it away into private hands.
It's just a fact. It's obvious from looking at the thing. The details are designed to confuse and trick you into thinking that what you can plainly see happening is OK somehow.
There is no counter factual where OpenAI exists as a non-profit and still inexplicably gets handed billions of dollars of compute to train LLMs. The for-profit company is a different thing from the non-profit and it exists for perfectly understandable reasons and I'm unsure why anyone other than Elon Musk pretends this doesn't make sense.
What is your proposed counter factual where the non-profit entity retains all ownership of the venture, but somehow finds hundreds of billions of dollars to train LLMs?
Having thought about this whole thing more I believe that non-profits should not be a separate type of entity that gets special tax treatment. People have different ideas of what constitutes legitimate non-profit activity. It just opens things up for tax avoidance and scams.