I think the idea is that non-profit money is much closer to public property, especially when the non-profit has this kind of charter. So the complaints about a potentially unfair deal are legitimate.
But I am not sure that the non-profit has less of the expected future money as a result, even before the yet undisclosed warrants.
On one hand, it has presumably smaller share than before (it’s tricky to know exactly, with capped profits for other investors and such, one really needs to calculate more precisely and not just presume). On the other hand, the restructuring is expected to increase OpenAI’s future market share by enabling it to expand faster. So, in expectation, this is, presumably, a smaller share of a larger pie. Whether this smaller share of a larger pie is smaller in expectation compared to the pre-existing situation is not clear.
The material effect of this restructuring is non-obvious: one needs to do some quantitative modeling, to take into account the undisclosed terms of the warrants, and so on in order to figure this out.
(It’s probably not an accident that Microsoft equity in OpenAI is not far from 10x of what they invested, and their original profit cap was 100x, and warrants require another 10x growth in valuation to start kicking in. It is likely that the board was trying to formulate a fair replacement of that 100x profit cap when formulating the warrants (but it’s really annoying that the terms of those warrants don’t seem to be disclosed; or might they be actually disclosed somewhere deep in the filed documents?).)
I think the idea is that non-profit money is much closer to public property, especially when the non-profit has this kind of charter. So the complaints about a potentially unfair deal are legitimate.
But I am not sure that the non-profit has less of the expected future money as a result, even before the yet undisclosed warrants.
On one hand, it has presumably smaller share than before (it’s tricky to know exactly, with capped profits for other investors and such, one really needs to calculate more precisely and not just presume). On the other hand, the restructuring is expected to increase OpenAI’s future market share by enabling it to expand faster. So, in expectation, this is, presumably, a smaller share of a larger pie. Whether this smaller share of a larger pie is smaller in expectation compared to the pre-existing situation is not clear.
The material effect of this restructuring is non-obvious: one needs to do some quantitative modeling, to take into account the undisclosed terms of the warrants, and so on in order to figure this out.
(It’s probably not an accident that Microsoft equity in OpenAI is not far from 10x of what they invested, and their original profit cap was 100x, and warrants require another 10x growth in valuation to start kicking in. It is likely that the board was trying to formulate a fair replacement of that 100x profit cap when formulating the warrants (but it’s really annoying that the terms of those warrants don’t seem to be disclosed; or might they be actually disclosed somewhere deep in the filed documents?).)