back to article OpenAI non-profit will run for-profit that has yet to make a profit

OpenAI has obtained a new lease on life. The cash-burning AI biz on Tuesday announced an agreement with Microsoft that will allow it to form a public benefit corporation and recapitalize, meaning it will be more attractive to investors. The restructuring deal caps more than 18 months of management turmoil and negotiation, …

  1. elDog Silver badge

    And I have a bridge to sell you.

    Why go to all these silly rigamaroles when you can just adopt the financial wizardry of the trump world and put your scams out into the open?

    I mean, since there are no regulatory restrictions in the US anymore (and who cares about the rest of the world?), a couple of handshakes and several trillion of worthless crypto-currencies, and all's right.

    SEC filings? As Emil Bove said "f em."

    (Apologies for the us-centric view. I'm sure the same shit-craft is happening elsewhere.)

  2. midnitet0ker

    The Dot-Com Crash Was A Lot Of Fun

    Capitalism is supposed to be "self-correcting" but that just means that bubbles like this implode spectacularly, not that markets learned from the dot-com boom to not burn wheelbarrows full of money inflating the values of zombie companies that are wildly insolvent (and will remain so in all reality).

    1. Wellyboot Silver badge

      Re: The Dot-Com Crash Was A Lot Of Fun

      If by 'burn' you mean 'reallocate' cash to a far better* place I agree completely, market bubble speculation is just a game of 'find the lady' by suits in a nice office.

      * in the 'Better mine than yours' sense.

  3. Wellyboot Silver badge

    OpenAI

    Restructuring is a polite term whereby companies cut the actual value of individual debts while maintaining (preferably increasing) the 'book' value.

    This isn't "a 10x return on Microsoft's $13.8 billion investment", this is just the next step along the path towards MS owning OpenAI outright and gaining enough of a hold on the market to easily justify the marginal risk (& cost). In the early years MS simply hired the developers, now they throw a small amount of cash at startups with interesting ideas and see which ducks float.

    MS - spotting potentially great software ideas since day-1.

  4. Long John Silver Silver badge
    Pirate

    Silence before the storm?

    The 'AI' landscape may be changing in unanticipated ways.

    Bundles of thought leading to 'AI' trace strongly to the 1980s, and threads, more tenuously, much further back. LLMs, and similar, were brilliant conceptions when viewed as data storage and interrogation tools, and as agents for automation. Unfortunately, high-profile AI development has fallen into the hands of clever technicians employed by adventurers. One is led to believe that the West, especially the USA, leads in the area of further conceptual and practical development. Perhaps, not so. The current Western paradigm for 'AI' R&D is focussed on 'the bigger, the better' and as size increases on the emergence of properties not already implicit to base theoretical structures. Already, the best known models exhibit eccentricities indicative of severe limitations to their application by the unwitting.

    Advances in chip technologies and chip mass production are bringing new players into the game; this despite the US Administration's strong efforts to establish a monopoly. Almost certain to come are cheaper and less power hungry chip configurations; these should coincide with parallel developments in underlying software to bring about more rapid training and smaller energy requirements for practical uses.

    These trends suggest that innovations in model structures, and in training regimens, don't depend upon the behemoths with which OpenAI is linked. People not bothered to create Arthur C. Clarke's 'HAL 9000', but content with tools lessening some burdens on human intellectual endeavour, will not seek to feed their creations with all they can get their hands upon of human slop expressed in digital format: the output of fools and vain ideologues having the same weight as that of sages. Subject, discipline, and task-specific 'AIs' will arise. These, as is so for cut-down versions of current mega-'AIs', shall fit within computational devices of modest (yet seemingly always increasing) technical specification. Moreover, being digital in nature, they, just like digital books, films, music, 3D-printer recipes, etc. will be freely shared regardless of people with Luddite thought processes seeking otherwise.

    It may be that OpenAI and similar current mega-players shall monopolise 'all singing and dancing' 'AIs' for use in the context of social media, of ignorant home-users, and of tools sold to naive Western governments. There should be plenty of money generated, but whether enough to meet present expectations is moot.

    Clearly, 'AI' tools are handy for promulgating 'values' and muting those deemed unacceptable. Censorship, ostensibly for 'the sake of the children' is rife. I use an 'AI'-tool to check my spelling as I write. When I refer to 'the Ukraine' it tells me I mustn't because that is no longer acceptable usage; at least, it doesn't yet have the gall to force me to conform or, I think, to report me to Mr Starmer's thought police. Presumably, many general purpose 'AIs' will not only object to one discussing 'Lolitas', but also to wrongful interpretations of historical events. Although the West at present is taking propaganda and rooting out 'disinformation' to high art, such as Dr Goebbels would approve, one must assume some nations elsewhere may do so according to their 'official narratives'. So, when the Internet is awash with general-purpose 'AIs' which can be interrogated, savvy users can play with several to compare and contrast the built-in slants of various corporations and countries.

    1. Wiretrip

      Re: Silence before the storm?

      I do agree that some niche uses will mean that quantised LLMs or VLMs will find their way into single GPU rigs in garages and bedrooms, and on-prem or cloud servers; but at the end of the day, the LLM is a dead end as far as AGI goes. I guess there is just too much bullshit involved, and it is convincing bullshit which makes it all the more dangerous and difficult to validate. We just need to decide how useful a bullshit machine actually is.

      1. Throg

        Re: Silence before the storm?

        Here's my favourite academic paper from recent years. :-)

        https://link.springer.com/article/10.1007/s10676-024-09775-5

        1. adsp42

          Re: Silence before the storm?

          I must confess I first thought this is a fake, perhaps even generated by an LLM.

          I'm more convinced now that it is a genuine academic paper. Still diggestible by general public.

          I liked this:

          "The problem here isn’t that large language models hallucinate, lie, or misrepresent the world in some way. It’s that they are not designed to represent the world at all; instead, they are designed to convey convincing lines of text. So when they are provided with a database of some sort, they use this, in one way or another, to make their responses more convincing. But they are not in any real way attempting to convey or transmit the information in the database. As Chirag Shah and Emily Bender put it: “Nothing in the design of language models (whose training task is to predict words given context) is actually designed to handle arithmetic, temporal reasoning, etc. To the extent that they sometimes get the right answer to such questions is only because they happened to synthesize relevant strings out of what was in their training data. No reasoning is involved […] Similarly, language models are prone to making stuff up […] because they are not designed to express some underlying set of information in natural language; they are only manipulating the form of language” (Shah & Bender, 2022). These models aren’t designed to transmit information, so we shouldn’t be too surprised when their assertions turn out to be false."

  5. Inventor of the Marmite Laser Silver badge

    Following the well established board level protocol for AI.

    1) Invest in AI

    2) Profit.

  6. Anonymous Coward
    Anonymous Coward

    OpenAI non-profit will run for-profit that has yet to make a profit

    Presumably to make the ever-increasing losses Tax-deductable against profits made elsewhere,

  7. Anonymous Coward
    Facepalm

    Oh look a thumbnail with two of Satan's best helpers!

  8. Anonymous Coward
    Anonymous Coward

    Blow out coming

    Very soon the bubble with burst and there will be a lot of fall out. But, LLMs will survive and thrive, just at a slower pace maybe different companies leading. Might take a while for the world to recover from the shock though, because when the Nasdaq drops 70% the ripples will spread wide. That's assuming we don't get a banking collapse first through sub-prime debts again. It's a race of fuses and they have been lit.

  9. Roland6 Silver badge

    >” So maybe you saw before this crazy convoluted diagram of all of the OpenAI entities,"

    Funny, that diagram seemed typical of many multi-nationals with all their tax avoidance schemes through which money is laundered.

    In this announcement, I didn’t catch the bit where these would be replaced, just that they are now going to be hidden behind a new unified front organisation.

  10. Charlie Clark Silver badge

    Enron

    all over again

    1. breakfast Silver badge

      Re: Enron

      I think the biggest differences between this and Enron are that a) this system has way more imaginary money to hook investors in and b) fraud is legal in America now so there will be no consequences for the fraudsters.

  11. adsp42

    Almost but not quite AGI

    "How OpenAI intends to define "most economically valuable work" and how an independent expert panel will verify an AGI declaration is an exercise left to the reader's imagination."

    I'm not an accountant, so I'm not sure what roundings are acceptable by trade, I suspect "most economically valuable" must have a finite number of digits after the decimal point.

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