Aside from the disagreements between these parties, what about the precedent of running a non-profit, and then transferring all IP to a for profit when it’s convenient to do so?

I wonder if the government or taxpayers have a case to bring regarding that.

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granzymes 3 hours ago | parent | next [-]

This case sets no precedent one way or the other on that question. The IP was transferred to the for-profit for fair value in 2019, and Musk never argued otherwise in this case.

The attorneys general of California and Delaware could challenge that 2019 IP transfer if they so wished on behalf of the public.

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mrhottakes 2 hours ago | parent | prev | next [-]

Transactions like that happen all the time and are not problematic if handled legally. Any of the interested parties could have sued over it, but none have.

	▲	atom_arranger 3 minutes ago \| parent \| next [-]
		The interested parties would be taxpayers. I think some groups are trying to look into it. 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.
	▲	adrr an hour ago \| parent \| prev [-]
		Because they got to participate in the early investment in the for profit entity. > 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. https://www.trendingtopics.eu/openai-cap-table-leak/

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Morromist 2 hours ago | parent | prev | next [-]

Yeah. I wonder if the question "Did OpenAI steal a non-profit worth what is now maybe hundreds of billions of dollars?" will ever be answered. If not it will be one of the biggest heists in history.

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gamblor956 an hour ago | parent | prev [-]

The non-profit received shares in the for-profit as a result of the transfer. Those shares are theoretically worth hundreds of billions.

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.