> OpenAI is an American artificial intelligence (AI) organization consisting of the non-profit OpenAI, Inc.[4] registered in Delaware and its for-profit subsidiary corporation OpenAI Global, LLC.[5]
IKEA [0] and Rolex [1] are structured in a similar manner, although different since they’re not US based.
[0] https://en.m.wikipedia.org/wiki/Stichting_INGKA_Foundation
[1] https://en.m.wikipedia.org/wiki/Hans_Wilsdorf#Hans_Wilsdorf_...
Nonprofits can already raise funds by e.g. selling T-Shirts, baked goods, ai services, etc…
And maybe to allow choosing the right people for the right job. If the non-profit has an ideological purpose, its leadership should probably reflect that. At the same time, the for-profit subsidiary probably works better under professional management.
Closing the huge fundraising gap OpenAI had as a nonprofit by returning profits from commercial efforts instrumental to, but distinct from, the nonprofits charitable purpose, without sacrififing any governance or control of the subordinate entity.
You basically never have a person in the chain actually making decisions for anything but to maximize profit.
First, the “OpenAI" whose profits are being discussed isn't a 501(c)3 charity, but a for-profit LLC (OpenAI Global, LLC) with three other organizations between it and the charity.
Second, charities and other nonprofits can make profits (surplus revenue), they just can't return revenues (but they can have for profit subsidiaries that return profit to them and other investors in certain circumstances.)
> The whole umbrella for-profit corp they formed when they became popular should be illegal
The umbrella organization is a charity. The for profit organizations (both OpenAI Global LLC that Microsoft invests in, and its immediate holding company parent which has some other investors besides the charity) are subordinate to the charity and its goals.
> and is clearly immoral.
Not sure what moral principal and analysis you are applying to reach this conclusion.
I'm not the parent, but I think it's clear: if I'm a charity, and I have a subordinate that is for profit, then I'm not a charity. I'm working for profit, and disguising myself for the benefits of being a charity.
Obviously, the for profit subsidiary ooerates for profit—and where its not a wholly owned subsidiary, it may return some profit to investors that aren't the charity—but neither the subsidiary nor the outside investors getbthe benefits of charity status.
The girl guides are a non-profit; they teach kids about outdoor stuff, community, whatever, they do good works, visit old folks, etc.
If for some legal reasons they had a subsidiary that sold cookies (and made a profit), with all the profits returned to the non-profit parent, I think that'd be ....fine? Right?
MS doesn't care about how money it cost, they care about the fact it's their ticket back into the fight with google and apple.
But they are similar in that both involve a nonprofit controlling subordinate for-profit entities.
The most obvious example is the corporate foundation, but if we believe the first result from a search you're right in they are controlled but not owned by the for-profit:
> A for-profit cannot own a nonprofit because a nonprofit has no owners. However, a for-profit can set up a structure in which it effectively has control over the nonprofit, subject to applicable laws, including those regarding private inurement, private benefit, and corporate self-dealing
> https://nonprofitlawblog.com/can-a-nonprofit-own-a-for-profi...
Perhaps it's all legal but I think it's very understandable to look at it and think it's a travesty.
