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Posted by paulpauper 1 day ago

OpenAI Moves to Complete Potentially the Largest Theft in Human History(thezvi.substack.com)
234 points | 93 comments
lokar 1 day ago|
They should at least have to pay the max marginal tax rate on all the donations they got that could have been tax deductible. And any other tax benefit they received.
overvale 1 day ago||
I'm so genuinely confused by all this. It seems that Altman has a lot of detractors here, and I'm not sure why (my fault for not keeping up I guess). But a company that wants to spend trillions of dollars on AGI infrastructure and hopes to re-shape the entire global economy surely needs to plow a staggering amount of money into its operations and not into a non-profit. I get that there is controversy over redirecting profits of a very successful business from a non-profit entity (which would be great) to private parties, but... that was always going to happen right? Am I just too cynical?

What am I missing? I'm genuinely curious.

Also, the largest theft in human history surely has to be the East India Company extracting something like 50 trillion from India over 200 years, right?

kamikazeturtles 23 hours ago||
> Also, the largest theft in human history surely has to be the East India Company extracting something like 50 trillion from India over 200 years, right?

I never understood these sorts of statements. I feel historical events maybe after the Victorian age can claim to be theft, otherwise it's just empires and conquest.

Adjusted for inflation, wouldn't Alexander the Great's plundering of Persia, which at the time comprised 40% of the world's population, be the greatest theft in human history, using your logic?

zozbot234 23 hours ago|||
The world population was a lot lower back then, and India is quite large to begin with.
y0eswddl 12 hours ago||||
>I feel historical events maybe after the Victorian age can claim to be theft, otherwise it's just empires and conquest.

"empires and conquest" is literally armed robbery.

overvale 23 hours ago||||
Yeah, you're right, it's not a fair comparison.
tbrownaw 22 hours ago||||
> I feel historical events maybe after the Victorian age can claim to be theft, otherwise it's just empires and conquest.

One criterion that might work is whether there's some greater power around that says it's theft, and is able/willing to enforce that in some manner.

So for example a successful conquest isn't theft, but a failed conquest is probably attempted theft (and vandalism of course).

IncreasePosts 23 hours ago||||
If we're going by theft as a percent of world GDP, then surely the biggest theft was when Zog stole Ug's best smashing rock
Terr_ 23 hours ago|||
That's nothin', my great^N ancestor was part of a horde that conquered the entire planet in a Grey-Goo apocalypse.

Sure, it's divided up amongst all the descendants now, but it was quite a heist.

whimsicalism 22 hours ago||||
when Zog stole Ug’s intellectual property rights in the starting of fire.
paulcole 23 hours ago||||
This was my favorite Far Side
ninetyninenine 23 hours ago|||
The measurement should be theft per capita or how many people did Sam Altman take from?

Divide total GDP by the population and turn it into one unit.

Ug's best smashing rock would be 1.

dyauspitr 20 hours ago||||
There no way Persia comprised 40% of the world population at that time with India and China around.
dumbledoren 19 hours ago|||
> I feel historical events maybe after the Victorian age can claim to be theft, otherwise it's just empires and conquest.

It was always theft. Having been done in the past does not make them less theft. The reason East India Company is shown as example for such things is that it is the first human organization that did those on an industrial scale and genocidally.

https://yourstory.com/2014/08/bengal-famine-genocide

It was already starving Indians by forcing them to plant opium instead of food crops to sell to the Chinese to kill them for money (20 million/year estimated dead from opium) in the late 18th century. And when the Chinese finally tried to stop it, Opium wars happened. The justification shown for that war was 'Free trade'. The justifications still havent changed, neither the practices. This should tell you why East India Company is specifically evil, because it is the first large scale application of the evil you see today and it invented a lot of its methods.

vessenes 23 hours ago|||
The article tracks some good historical quotes. But it doesn’t seem to try and steel man the other side, that is, what’s oAI worth without its workers and an attached for profit company?

To the extent the answer is ‘much lower’ then he could have spent a whole blog post congratulating California ag and Sam for landing the single largest new public charity in real dollar terms maybe ever.

If the point is “it sticks in my craw that the team won’t keep working how they used to plan on working even when the team has already left” then, fair enough. But I disagree with theft as an angle; there are too many counter factuals to think through before you should make a strong case it’s theft.

Put another way - I think the writer hates Sam and so we get this. I’m guessing we will not be reading an article where Ilya leaving and starting a C corp with no charitable component is called theft.

pfortuny 23 hours ago|||
[deleted]: I need to be calm before posting.
dang 22 hours ago||
If only we all would!
BrenBarn 23 hours ago|||
Are you saying that because you're cynical you thought Altman would always go for the biggest money grab possible, and so you won't criticize him on that basis? I'm cynical enough to think a lot of people will always go for the biggest money grab possible, but I still will criticize them for doing so.
overvale 23 hours ago||
No, I'm saying I'm cynical because I assume that whenever this much money is involved there's no way events unfold in a fair, ethical, utopian way. It always turns into a knife fight in the mud.
BrenBarn 23 hours ago|||
Okay, but what I'm asking about is this part of your previous comment:

> It seems that Altman has a lot of detractors here, and I'm not sure why

Why are you confused/surprised that Altman has detractors?

overvale 22 hours ago||
I should have structured my sentences a little better. I'm not confused about why he has detractors, I'm confused as to why people thought it would go any other way with this munch money on the line.

But, you're right, that's no reason to refrain from criticizing them for it.

horisbrisby 17 hours ago||||
It seems a bit strange to me that we as a society have agreed to arrest everyone in the knife fight in the mud despite very little risk of innocent parties wandering into the mud to be hurt, but if you put on a dress shirt..
jgalt212 23 hours ago|||
But they should unfold in a legal way. And I'm not convinced that they have.
skinnymuch 23 hours ago||
Yes. Colonialism is certainly going to be worse. One AI company going from non profit to whatever it is now is not close.
mentalgear 1 day ago||
> It’s as if a mugger demanded all your money, you talked them down to giving up half your money, and you called that exchange a ‘change that recapitalized you.’
halJordan 21 hours ago|
Strictly speaking, in this scenario the mugger was recapitalized
periodjet 22 hours ago||
Theft of what, and from whom? The author breathlessly jumps around without ever establishing the most basic premise. Seems like clickbait doom-mongering more than anything substantial.
CPLX 21 hours ago|
Here’s an analogy that might help:

Imagine if an executive was running the world’s largest charity for cancer research, which was chartered to make sure a cure remained in the public trust and raised millions with that promise.

But then once they discovered a cure for cancer the executive instead decided to transfer that cure to a ruthlessly competitive company they personally owned a large percentage of and then become a billionaire many times over.

JohnnyMarcone 20 hours ago||
I thought Altman didn't own hardly any equity.
MagnumOpus 1 hour ago|||
Bloomberg reported last year that Sam is angling for the board to give him 7% of the company, and the board was seriously discussing it. The optics weren’t right at the time, but you can rely on something being in planning.

Sam doesn’t do anything for free, even though he is already a billionaire 2-3 times over.

senordevnyc 18 hours ago||||
He doesn't, which the Sam haters consistently just ignore or gloss over. Or my favorite, they pivot to complaining about how OpenAI is investing in companies he has a stake in, so that's how he's grifting everyone! Which makes no sense, because he could have pretty easily openly negotiated tens of billions in equity in OpenAI if he was after that, rather than try and do some kind of sleight of hand behind the scenes to maybe make 1% of that. Maybe.
CPLX 4 hours ago|||
Altman isn’t the only beneficiary, my analogy is just that, an analogy.

The property of a charity is being pillaged for the benefit of private parties, like Microsoft, existing employees, and yes of course Altman himself via various means.

You can “well actually” this all day, but at the beginning of the story there’s a charity with millions of dollars to do research and the promise to keep the resulting advancements in the public trust.

At the end of the story there will be billions of dollars in the hands of private individuals and the IP the charity created in the hands of a ruthless for profit company.

piva00 7 hours ago|||
What's in it for Altman then? It's money but how?
deepdarkforest 23 hours ago||
Breaking news: For profit company chases profit, briefly pretends it's not while it is
khazhoux 23 hours ago|
This is it exactly.

Plus, why do people think OAI is still special? Facebook, Google, and many smaller companies are doing the exact same work developing models.

47282847 18 hours ago||
It is special because of what is being discussed here: it attempted (pretended?) to do so as a non-profit, which arguably gave it early support by people who otherwise may not have provided it. None of the other players you mention did so, which to me makes it an unfair advantage. Or not, given that it seems that anything is fair that you can get away with these days.
nroets 23 hours ago||
"Theft" means taking something from someone without consent. Who lost what ? There is no law suite, so maybe it's a donation ??
AJ007 4 hours ago||
The AI researchers who joined and worked for less money than they would have been paid by a big tech company because they thought it was the right thing to do.
verdverm 23 hours ago|||
The taxpayers / government. If they have been abusing their NP status to avoid taxes, they should have to back pay those.
khazhoux 23 hours ago|||
What taxes are they not paying?

I am unable to find any concrete claim of specific tax avoidance. Only these exasperated “but taxes” comments.

asadotzler 22 hours ago||
Non-profits are literally tax-exempt. OAI spent 10 years being tax-exempt in exchange for doing work that fully benefits the public. Now that work, 10 years of tax exempt work, is being handed over to a taxable outfit, a for-profit organization. If the result of 10 years of tax-exempt efforts get handed to a for-profit company, the taxes that were never paid should be because the public benefit that got them the tax benefit wasn't fulfilled, in fact it was stolen and handed to ultra-wealthy capitalists.
pixl97 20 hours ago|||
You mean the results that a few other companies almost instantly copied and productive themselves once the way to do it was discovered? There is no moat around LLMs.
oklahomasports 21 hours ago||||
Do you think really think they were profitable during that time?
khazhoux 21 hours ago|||
What taxes did the non-profit skirt?

All the sources I can find say that the revenue of ChatGPT was through the for-profit division, and that they’ve been paying taxes on all their revenue.

Is there some other tax that they’ve avoided paying?

verdverm 20 hours ago||
Sales & property, see my nearby comment for links
khazhoux 20 hours ago||
Oh shit, the company that revolutionized AI didn’t pay their fair share of SF property taxes. Now I understand the outrage!
dumbledoren 19 hours ago||
It doesnt matter what kind of tax they didnt pay. They SHOULD pay tax. Otherwise this makes it a loophole for private companies to dump research & development costs on the taxpayer but reap all the profits.
Esophagus4 6 hours ago||
Huh? The loophole is already there.

Everything of their restructuring was signed off on by multiple states’ attorneys general. And their for-profit entity pays taxes like any other company.

Making them pay tax on stuff they did while a non-profit is making up laws on the fly - a strong, rule-of-law-based system is critical for the US to function properly.

You can’t just arbitrarily make decisions based on what you think should happen because it’s fair or unfair.

If you want OpenAI to pay back taxes, you need to change the laws first.

verdverm 2 hours ago||
The issue is not the laws. The issue is that OpenAI mislead officials and externalized costs on the taxpayer.The extent to which this happened should be looked into by professionals.

It's not about changing the laws, it's about enforcing the ones we have fairly. Too many orgs and companies buy politicians, and now ballrooms for them

next_xibalba 23 hours ago|||
Surely they have never turned a profit and are a long way from being profitable. If so, what taxes, current or back, would they owe?
verdverm 23 hours ago|||
Income taxes are not the only tax non-profits are exempted from. Sales and property taxes are others, depending on jurisdiction, California being one such state. I am not familiar if OpenAI-NP has been exempted from these

https://www.fplglaw.com/insights/california-nonprofit-law-es...

selectodude 23 hours ago|||
The money they received was tax deductible for the people who “donated it”. They money should have been taxed as income for either the earner or OpenAI.
verdverm 23 hours ago|||
I'd be curious if people were actually writing off their OpenAI bills as donations. That would be a big number for the enterprise deals, if they qualify as a donation
the_duke 23 hours ago|||
Surely the money coming in would otherwise have been investments exchanged for stock, which are not taxed until gains are realized.
whatpeoplewant 22 hours ago||
The IP concern is real, but it isn’t binary: we can move from monolithic pretraining on scraped corpora to multi-agent, agentic LLM workflows that retrieve licensed content at inference with provenance, metering, and revocation. Distributed agentic AI lets rights holders expose APIs or sandboxes so models reason in parallel over data without copying it, yielding auditable logs and pay-per-use economics. Parallel agentic AI pipelines can also enforce policy (e.g., no-train/no-store) as first-class constraints, which is much harder to do with a single opaque model.
labrador 1 day ago||
It seems weird to say speculative gains were lost
zozbot234 1 day ago||
Especially when those same speculative gains were predicated on the "theft" happening in the first place. The non-profit got at least a full order of magnitude more value out of the current deal than they could have gotten had OpenAI left their corporate structure unchanged. And they still get to control more of OpenAI if its valuation explodes, so the "upside" profile that they used to get by capping profits is broadly unchanged. Want even more upside? Then the non-profit can just plow some of their current stake into buying cheap options at their fair market price.
FeepingCreature 1 day ago||
Sure, but in this case the speculative scenario is the entire premise behind the existence of the charity in the first place.
labrador 1 day ago|||
The charity was premised on either:

- AGI being cheap to develop, or

- finding funders willing to risk billions for capped returns.

Neither happened. And I'm not sure the public would invest 100's of billions on the promise of AGI. I'm glad there are investors willing to take that chance. We all benefit either way if it is achieved.

frotaur 1 day ago|||
'We all benefit either way'?

I am not sure that making labour obsolete, and putting the replacement in the hands of a handful of investor will result in everybody benefiting.

labrador 1 day ago||
That's a different conversation. I believe AGI will be a net benefit.
grayhatter 22 hours ago|||
I feel as though you're ignoring the most important part of that sentence. I assume you meant to write;

I believe that AGI will be a net benefit to whomever controls it.

I would argue that if a profit driven company rents something valuable out to others, you should expect it would benefit them just as much if not more, than those paying for that privilege. Rented things may be useful, but they certainly are not a net benefit to the system as a whole.

labrador 20 hours ago||
No, I believe AGI will have a net benefit for all of humanity. The telephone system was a net benefit for all Americans even though for a time AT& T (Ma Bell) controlled it.
grayhatter 10 hours ago||
Your pattern matching skills leave a lot of room for improvement.

Information interconnection is meaningfully different from AGI, and the environment ATT and Bell existed within no longer exist.

labrador 5 hours ago||
AGI is fantasy at this point and your assumption that AGI would give OpenAI unprecented powers is the Musk/Yudkowsky/Hinton argument that AI will dominate and enslave us.

Drop those assumptions and my point stands that throughout history, monopolistically-controlled transformative technologies (telephones, electricity, vaccines, railroads) have still delivered net benefits to society, even if imperfectly distributed. This is just historical fact.

grayhatter 2 hours ago||
> AGI is fantasy at this point and your assumption that AGI would give OpenAI unprecented powers is the Musk/Yudkowsky/Hinton argument that AI will dominate and enslave us.

Yeah, like I said, room for improvement. I find the argument that AGI or sAGI should be feared, or is likely to turn "evil" absurd in the best case. So your arguing against a strawman I already find stupid.

Telephones, increased the speed of information transfer, it couldn't produce on it's own. Electricity allowed transmission of energy from one place to another, and doesn't produce inherent value in isolation, vaccines are in an entirely different class of advancement, (so I have to idea how you mean to apply it to the expected benefits of AGI? I assume you believe AGI will have something to do with reducing disability), railroads again, like energy or telephones, involved moving something of value from one place to another.

AGI is supposed to produce a potentially limitless amount of inherent value on its own, right? It will do more than just move around components of value, but more like a diamond mine, it will output something valuable as a commodity. Something that can easily be controlled... oh but it's also not concrete, you can never have your own, it's only available for rental, and you have to agree to the ToS. That sounds just like all previous inventions, right?

You're welcome to cite any historical facts you like, but when you're unwilling or unable to draw concrete parallels, or form convincing conclusions yourself, and hand wave, well most impressivive inventions in the past were good so I feel AGI will be cool too!

Also, the critical difference (ignoring the environmental differences between then and now) between the inventions you cited, and AGI, is the difficulty in replicating any technology. Other than "it happened before to most technologies" is there reason I should believe that AGI would be easy to replicate for any company that wants to compete against the people actively working to increase the size of their moat? copper wire, and train tracks are easy to install. Do you expect AGI will be easy for everyone to train?

labrador 2 hours ago||
You insulted me twice so this conversation is over
Zardoz84 23 hours ago|||
There isn't AGI
labrador 23 hours ago||
Exactly. That's why I called them speculative.
FeepingCreature 23 hours ago|||
"Neither happened"? I wasn't aware the OpenAI capped-profit corp had a funding problem?
JohnnyMarcone 20 hours ago||
A lot of funding was predicated on them making the transition. Also they would not have been able to IPO without the transition, so there was a funding problem when you look at it that way.
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