| Advertise / All Articles / Unsubscribe | Hello, Bay Areaers! | Today, we have three important stories about OpenAI. Letās explore what this leading player in the AI world is really up to. | | SPONSORED BY | | | | Oncely.com is the #1 Marketplace for AI Lifetime Deals. | | šļø Bay Area Letters brings you the Latest AI, Tech, and Business insights from Silicon Valley. Donāt remember subscribing or want to stop receiving our newsletters completely? Unsubscribe here |
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| | AI | OpenAI May Change Its Nonprofit Model | | Co-founder and CEO Sam Altman mentioned that OpenAI is likely to modify its current corporate structure, potentially shifting from a hybrid nonprofit model to a more traditional for-profit business to accommodate investor demands. | OpenAI is in talks to raise $6.5 billion, contingent on restructuring and removing the profit cap for investors. The current model, where a nonprofit controls the for-profit arm, is seen as a point of frustration for investors. OpenAI emphasizes its mission of building AI that benefits everyone and asserts that the nonprofit will remain core to this mission.
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| | AI | Uncovering OpenAIās Equity Structure | | Do you think you bought equity from OpenAI? That's not correct. Investors and employees did not receive traditional equity. Instead, they got profit participation units (PPUs). As long as the company is profitable, they have the right to share in future profits. | OpenAI has a unique structure where its for-profit subsidiary is controlled by a nonprofit, allowing it to raise capital while maintaining a nonprofit mission focused on safe AGI. Investors and employees do not receive traditional equity but are given rights to future profit distribution via PPUs, contingent on OpenAI turning a profit. PPUs offered to employees vest over four years, and while they have no immediate intrinsic value without profits, investors are still willing to purchase them, banking on OpenAIās future success. The AI sectorās hot demand drives investor interest, despite OpenAI being far from profitability, making PPUs speculative but potentially lucrative for those willing to sell during high valuations.
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| | AI | OpenAIās New Model Seems Useless | | OpenAI released the o1-preview model a few days ago, claiming it to be the strongest reasoning model ever. However, after a few days of testing, the OpenAI user community was in an uproar, with many agreeing that the new model was impractical and uesless. | The o1-preview model is slower to respond, taking up to several minutes to generate outputs, which limits its usefulness for real-time applications. | The cost of o1-preview is significantly higher than other models, with a 200-300% increase in pricing, which may not be justifiable given its current limitations. | Many developers still find GPT-4o more efficient for simpler, faster tasks, making o1-preview a niche option for specialized use cases. | Developers acknowledge that O1 may possess superior reasoning capabilities compared to GPT-4o, but emphasizes that the API differences are too challenging to manage. | |
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| | MORE NEWS | The Polaris Dawn mission successfully reached a record high orbit above Earth, with astronauts traveling farther than any humans have since the Apollo moon missions. Elon Musk announced that SpaceX will launch its first uncrewed flight to Mars in two years. Peloton's former billionaire CEO, John Foley, reveals he has lost all his wealth and had to sell his possessions amid the company's stock decline. Oprah Winfrey will host an ABC special titled "AI and the Future of Us," exploring the societal impact of artificial intelligence, airing on September 12.
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