{"id":113464,"date":"2024-10-12T23:18:46","date_gmt":"2024-10-12T16:18:46","guid":{"rendered":"https:\/\/hotvideos24.online\/?p=113464"},"modified":"2024-10-12T23:18:46","modified_gmt":"2024-10-12T16:18:46","slug":"changing-openais-nonprofit-structure-could-have-big-consequences","status":"publish","type":"post","link":"https:\/\/hotvideos24.online\/?p=113464","title":{"rendered":"Changing OpenAI&#8217;s nonprofit structure could have big consequences"},"content":{"rendered":"<p> <script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<\/p>\n<div>\n<p>NEW YORK (AP) \u2014 The <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/hub\/artificial-intelligence\">artificial intelligence<\/a><\/span> maker OpenAI may face a costly and inconvenient reckoning with its nonprofit origins even as its <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/openai-chatgpt-vc-funding-round-nonprofit-bc9ab24c7affb601d5f650e4aca1b988\">valuation recently exploded to $157 billion<\/a><\/span>. <\/p>\n<p>Nonprofit tax experts have been closely watching OpenAI, the <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/openai-searchgpt-chatgpt-search-engine-cc8c0bff15d69c845f5de0df1e0a89a2\">maker of ChatGPT<\/a><\/span>, since last November when its board <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/altman-openai-chatgpt-31187f7f6eca8ff9d0eef7585aac6ace\">ousted and rehired CEO Sam Altman<\/a><\/span>. Now, some believe the company may have reached \u2014 or exceeded \u2014 the limits of its corporate structure, under which it is organized as a nonprofit whose mission is to develop artificial intelligence to benefit \u201call of humanity\u201d but with for-profit subsidiaries under its control.<\/p>\n<p>Jill Horwitz, a professor in law and medicine at UCLA School of Law who has studied <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/hub\/openai-inc\">OpenAI<\/a><\/span>, said that when two sides of a joint venture between a nonprofit and a for-profit come into conflict, the charitable purpose must always win out.<\/p>\n<p>\u201cIt\u2019s the job of the board first, and then the regulators and the court, to ensure that the promise that was made to the public to pursue the charitable interest is kept,\u201d she said. <\/p>\n<p>Altman recently confirmed that OpenAI is considering a <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/chatgpt-openai-sam-altman-nonprofit-859bff5c19845f51796244e0072e2dfb\">corporate restructure<\/a><\/span> but did not offer any specifics. A source told The Associated Press, however, that the company is looking at the possibility of turning OpenAI into a public benefit corporation. No final decision has been made by the board and the timing of the shift hasn\u2019t been determined, the source said.<\/p>\n<p>In the event the nonprofit loses control of its subsidiaries, some experts think OpenAI may have to pay for the interests and assets that had belonged to the nonprofit. So far, most observers agree OpenAI has carefully orchestrated its relationships between its nonprofit and its various other corporate entities to try to avoid that. <\/p>\n<p>However, they also see OpenAI as ripe for scrutiny from regulators, including the Internal Revenue Service and state attorneys general in Delaware, where its incorporated, and in California, where it operates. <\/p>\n<p>Bret Taylor, chair of the OpenAI nonprofit\u2019s board, said in a statement that the board was focused on fulfilling its fiduciary obligation. <\/p>\n<p>\u201cAny potential restructuring would ensure the nonprofit continues to exist and thrive, and receives full value for its current stake in the OpenAI for-profit with an enhanced ability to pursue its mission,\u201d he said. <\/p>\n<p>Here are the main questions nonprofit experts have: <\/p>\n<h2>How could OpenAI convert from nonprofit to for-profit? <\/h2>\n<h2\/>\n<p>Tax-exempt nonprofits sometimes decide to change their status. That requires what the IRS calls a conversion. <\/p>\n<p>Tax law requires money or assets donated to a tax-exempt organization to remain within the charitable sector. If the initial organization becomes a for-profit, generally, a conversion is needed where the for-profit pays the fair market value of the assets to another charitable organization.<\/p>\n<p>Even if the nonprofit OpenAI continues to exist in some way, some experts argue it would have to be paid fair market value for any assets that get transferred to its for-profit subsidiaries.<\/p>\n<p>In OpenAI\u2019s case, there are many questions: What assets belong to its nonprofit? What is the value of those assets? Do they include intellectual property, patents, commercial products and licenses? Also, what is the value of giving up control of the for-profit subsidiaries?<\/p>\n<p>If OpenAI were to diminish the control that its nonprofit has over its other business entities, a regulator may require answers to those questions. Any change to OpenAI\u2019s structure will require it to navigate the laws governing tax-exempt organizations.<\/p>\n<p>Andrew Steinberg, counsel at Venable LLP and a member of the American Bar Association\u2019s nonprofit organizations committee, said it would be an \u201cextraordinary\u201d transaction to change the structure of corporate subsidiaries of a tax-exempt nonprofit.<\/p>\n<p>\u201cIt would be a complex, involved process with numerous different legal and regulatory considerations to work through,\u201d he said. \u201cBut it\u2019s not impossible.\u201d<\/p>\n<h2>Is OpenAI carrying out its charitable mission? <\/h2>\n<p>To be granted tax-exempt status, OpenAI had to apply to the IRS and explain its charitable purpose. OpenAI provided The Associated Press a copy of <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/openai-nonprofit-application-tax-exempt-status-ebf38549cdf0529fc5ec727e2815ed12\">that September 2016 application<\/a><\/span>, which shows how significantly the organization\u2019s plans for its technology and structure have changed. <\/p>\n<p>OpenAI spokesperson Liz Bourgeois said in an email that the organization\u2019s missions and goals remained constant, though the way it\u2019s carried out its mission has evolved alongside advances in technology.<\/p>\n<p>When OpenAI incorporated as a nonprofit in Delaware, it wrote that its purpose was, \u201cto provide funding for research, development and distribution of technology related to artificial intelligence.\u201d In tax filings, it\u2019s also described its mission as building, \u201cgeneral-purpose artificial intelligence (AI) that safely benefits humanity, unconstrained by a need to generate financial return.\u201d<\/p>\n<p>Steinberg said there is no problem with the organization\u2019s plans changing as long as it reported that information on its annual tax returns, which it has.<\/p>\n<p>But some observers, including Elon Musk, who was a board member and early supporter of OpenAI and <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/elon-musk-open-ai-sam-altman-artificial-intelligence-6b734fe41cc24cb3029a0a863e73f190\">has sued the organization<\/a><\/span>, are skeptical that it has been faithful to its mission. <\/p>\n<p>The \u201cgodfather of AI\u201d <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/ai-godfather-google-geoffery-hinton-fa98c6a6fddab1d7c27560f6fcbad0ad\">Geoffrey Hinton<\/a><\/span>, who was <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/nobel-prize-physics-fc0567de3f2ca45f81a7359a017cd542\">co-awarded the Nobel Prize in physics<\/a><\/span> on Tuesday, has also expressed concern about OpenAI\u2019s evolution, openly boasting that one of his former students, Ilya Sutskever, who went on to co-found the organization, helped oust Altman as CEO before bringing him back. <\/p>\n<p>\u201cOpenAI was set up with a big emphasis on safety. Its primary objective was to develop artificial general intelligence and ensure that it was safe,\u201d Hinton said, adding that \u201cover time, it turned out that Sam Altman was much less concerned with safety than with profits. And I think that\u2019s unfortunate.\u201d <\/p>\n<p>Sutskever, who led a team focused on AI safety at OpenAI, <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/openai-ilya-sutskever-leaving-chatgpt-cofounder-419276b50007ad41adfd27764da3188c\">left the organization in May<\/a><\/span> and has started his own AI company. OpenAI for its part says it is proud of its safety record.<\/p>\n<h2>Will OpenAI board members avoid conflicts of interest? <\/h2>\n<h2\/>\n<p>Ultimately, this question returns to the board of OpenAI\u2019s nonprofit, and the extent to which it is acting to further the organization\u2019s charitable mission. <\/p>\n<p>Steinberg said that any regulators looking at a nonprofit board\u2019s decision will be most interested in the process through which it arrived at that decision, not necessarily whether it reached the best decision. <\/p>\n<p>He said regulators, \u201cwill often defer to the business judgment of members of the board as long as the transactions don\u2019t involve conflict of interests for any of the board members. They don\u2019t stand to gain financially from the transaction.\u201d<\/p>\n<p>Whether any board members were to benefit financially from any change in OpenAI\u2019s structure could also be of interest to nonprofit regulators. <\/p>\n<p>In response to questions about if Altman might be given equity in the for-profit subsidiary in any potential restructuring, OpenAI board chair Taylor said in a statement, \u201cThe board has had discussions about whether it would be beneficial to the company and our mission to have Sam be compensated with equity, but no specific figures have been discussed nor have any decisions been made.\u201d <\/p>\n<h2>___<\/h2>\n<p>The Associated Press and OpenAI have <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/article\/openai-chatgpt-associated-press-ap-f86f84c5bcc2f3b98074b38521f5f75a\">a licensing and technology agreement<\/a><\/span> that allows OpenAI access to part of AP\u2019s text archives.<\/p>\n<h2>___<\/h2>\n<p>Associated Press coverage of philanthropy and nonprofits receives support through the AP\u2019s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP\u2019s philanthropy coverage, visit <span class=\"LinkEnhancement\"><a class=\"Link AnClick-LinkEnhancement\" data-gtm-enhancement-style=\"LinkEnhancementA\" href=\"https:\/\/apnews.com\/hub\/philanthropy\">https:\/\/apnews.com\/hub\/philanthropy<\/a><\/span>.<\/p>\n<\/p><\/div>\n<p><script>\n  window.fbAsyncInit = function() {\n      FB.init({\n              appId : '870613919693099',\n          xfbml : true,\n          version : 'v2.9'\n      });\n  };\n  (function(d, s, id){\n     var js, fjs = d.getElementsByTagName(s)[0];\n     if (d.getElementById(id)) {return;}\n     js = d.createElement(s); js.id = id;\n     js.src = \"https:\/\/connect.facebook.net\/en_US\/sdk.js\";\n     fjs.parentNode.insertBefore(js, fjs);\n   }(document, 'script', 'facebook-jssdk'));\n<\/script><br \/>\n<br \/><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<br \/><div data-type=\"_mgwidget\" data-widget-id=\"1660802\">\r\n<\/div>\r\n<script>(function(w,q){w[q]=w[q]||[];w[q].push([\"_mgc.load\"])})(window,\"_mgq\");\r\n<\/script>\r\n<br \/>\n<br \/><a href=\"https:\/\/apnews.com\/article\/openai-sam-altman-nonprofit-equity-investment-irs-1447dc7589ae312017f7141384b19535\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>NEW YORK (AP) \u2014 The artificial intelligence maker OpenAI may face a costly and inconvenient reckoning with its nonprofit origins even as its valuation recently exploded to $157 billion. Nonprofit &hellip; <a href=\"https:\/\/hotvideos24.online\/?p=113464\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-113464","post","type-post","status-publish","format-standard","hentry","category-business","entry"],"_links":{"self":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/113464","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=113464"}],"version-history":[{"count":0,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/113464\/revisions"}],"wp:attachment":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=113464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=113464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=113464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}