wateringcan 12 hours ago

According to the assembly rules (if I am understanding them correctly), amendments like that are considered out of order and can be shot down with a majority vote:

"92. An amendment to any bill, other than a bill stating legislative intent to make necessary statutory changes to implement the Budget Bill, whether reported by a committee or offered by a Member, is not in order when the amendment relates to a different subject than, is intended to accomplish a different purpose than, or requires a title essentially different than, the original bill."

http://www.leginfo.ca.gov/rules/assembly_rules.pdf

That being said, it seems that typically nobody in the legislature ever cares to challenge it. I saw it happen for another bill this session too (an AI bill that became something about commercial fishing).

odo1242 12 hours ago

~~This is kinda ridiculous, especially considering the bill wouldn’t even affect OpenAI itself (that would make it an ex post facto law) but just close the loophole for the future.~~ (edit: I misread)

I say this as a user of AI, I’ve seen the nonprofit structure get abused way too much for my liking. Not that I have any solutions to the problem though.

  • ipsum2 12 hours ago

    Why wouldn't it apply? From what I can tell, openai is still (ostensibly) a non-profit

  • zo1 3 hours ago

    The word "non-profit" is the problem. People assume it means charity or "company that does good without seeking profit" or some similar variation.

    Instead, they are basically government-codified vehicles for tax, accounting and coordination purposes that allow laundering of money through plausible salaries and plausible expenses in the process of doing their stated "good deed". The "good" they do is secondary, as they are essentially entities that need want and are encouraged to self-perpetuate. Remember, the salaries and expenses go out first before the actual charity portion.

    Without quibbling over definitions and tax-terms, I'd say the same essentially applies to "charities" and "churches" and "religious organizations".

thaumasiotes 12 hours ago

I would have liked to read something about the legal mechanics here. The bill has had the entirety of its text removed, and the text has been replaced with a thoroughly trivial change to the required procedure for selling aircraft under some circumstances. (Instead of posting public notice in three public places, you have to post it in five public places.)

Obviously, (1) the purpose of this is to withdraw the bill; and (2) nobody really cares about the adjustment to the sale procedure.

So I can infer that replacing the bill with an unrelated bill of the same name is easier than replacing it with nothing at all. But why is that?

  • BrenBarn 10 hours ago

    My understanding is that it's a way to game the system of legislative procedure. Basically if the original bill went through certain steps in the process (like committee votes), the gutted-and-amended one still "counts" as having gone through those steps, and doesn't have to start over. This means it can be passed more quickly. In theory there are ways to insist that it must start over, but in practice it's not done.

    • m463 10 hours ago

      sort of how software updates work after an app sellout happens.

      • renewiltord 10 hours ago

        Haha, that's perfect. Or the Boeing 737 MAX.

    • thaumasiotes 9 hours ago

      > This means it can be passed more quickly.

      Is that a goal here? I'm hypothesizing that this maneuver has been done in order to withdraw the original bill, not in order to pass the new bill. I assume that if the new bill fails, the maneuver will have succeeded.

      The question is why this was easier than actually killing the original bill.

ipsum2 12 hours ago

Gary Marcus has a tendency of not telling the truth and cherry picking facts, but in this case, the bill change does seem real.

It is disgusting that he is using someone's suicide as a conspiracy theory though.

https://legiscan.com/CA/text/AB501/2025

  • Taek 12 hours ago

    If I recall, the suicide had some highly suspicious circumstances and calls to question whether it was actually a suicide had worthwhile merit.

    • changoplatanero 12 hours ago

      What I heard was that it was that the poor fellow tried to shoot himself but didn't get a direct hit. Because there was some time passed between the shooting and the death, they didn't find the gun and the body in the same place that you would expect.

    • infecto 11 hours ago

      I don’t recall that at all but it seems to fit well with the anti-OpenAI crowd.

      There is a real question about copyright that still needs to be answered but I don’t think that discussion needs to be polluted with the tragic suicide if that person. It’s nothing more than a conspiracy at this point, something that Gary likes to do a lot.

  • simiones 9 hours ago

    When a whistleblower against a hugely powerful, rich, and politically connected company commits suicide, especially when his own parents believe and are trying to prove that it wasn't suicide, calling it "using someone's suicide as a conspiracy theory" is really hiding at least half the story.

mentalgear 9 hours ago

This seems like blatant corruption, based on points the article mentions:

a. Making a bill that was about AI suddenly only about "airlines"

b. this happened just after an alleged call from Altman to Diane Papan (who introduced the bill)

---

The best comment/course of action I have seen on this article is from Bruce Olsen who actually took action to get journalists to notice.

If you care about fairness/the law in AI (& society), and have someone you know in journalism, I would suggest you to do the same. Or even just send an email to the office of Diane Papan (bill owner).

[0] https://a21.asmdc.org/contact-frame

---

Appendix: Bruce's letter for reference

> I sent the following note to Phil Matier, GOAT California political reporter. Hope it helps.

///////

Subject: Who Got To Diane Papan on AB-501?

Phil -

I'm a longtime fan, used to listen on KCBS when I lived in the Bay Area. You, Madden, and Al Hart were my favorites. Great, great analysis, which I sorely miss.

Did Sam Altman get to Diane Papan?

Her bill preventing OpenAI from converting away from a non-profit suddenly became a bill about aircraft liens (!) Sounds like the same kind of billionaire bullshit that's going around these days.

https://open.substack.com/pub/garymarcus/p/breaking-bill-tha...

It stinks. I'm sure you'll be able to do something with this lead.

I don't have any $kin in this game. I'm retired and follow Marcus's writing, and I'm also a citizen who knows how important this is.

Bruce Olsen

HenryBemis 9 hours ago

I feel that there a few people (wielding extreme power) in this world that are/were cancer for humanity. Hitler (obviously), Stalin (obviously), Mao (obviously). Two more that don't have blood on their hands (debatable for Zuckerberg - Myanmar) but have messed up plenty of lives are Zuckerberg (already done - through action, inaction, and corruption) and now Altman (about to do - through action, and corruption).

Every time his name is in the new I 'like' him less and less.

I hope some 'wise king' will stop him, or at least slow him/them down until controls are in place. We cannot have a "move fast/break things" for _this_ newest technology.

I totally admire the 'setup' that US has, making it the 'best inventor' in the world (gathering talent, giving them the tools/funding/environment to thrive), but this reminds me the Hellhounds from Supernatural. We don't see them, but they are out to get us.

I foresee the future.. Altman will be on Joe Rogan in a couple of years from now stating how he was 'tricked' into making the mistake (a la Zuck), which caused upset, and havoc, and ....

As for Diana Papan.. I will go ahead an imagine that she secured the funding she needs for her next campaigns!! And so the lobbying (aka legal bribing/buying politicians) continues!!!

  • wodenokoto 7 hours ago

    Pol Pot, Genghis Khan.

    I really fail to see how converting OpenAI to what it de facto is - a for profit company - places Altman in this group of people.

    I do agree that they need to pay taxes, equivalent of what they'd paid had they been a regular corporation all the time, but at worst this amounts to a bit of tax fraud, not genocide.

khazhoux 12 hours ago

How does blocking their conversion help citizens? Are we saying all AI companies must be nonprofit?

  • JoshTriplett 11 hours ago

    No. We're saying that if an entity starts out as a non-profit saying that it's operating for the good of the world, and in the process gains goodwill and various benefits, it can't subsequently turn into a for-profit company.

    • xlbuttplug2 11 hours ago

      inb4 loophole to create a new company and transfer over all the non-profit's assets.. and keep the same name somehow.

  • somenameforme 12 hours ago

    They were not-for-profit until the potential for large-scale profit emerged, at which point they decided to become for-profit. It's taking the whole 'socialize costs, privatize profits' to an entirely new level.

    The exact legalese preventing or enabling this is unclear to me, but if it became a norm then basically every for-profit startup would likely start out as a not-for-profit taking advantage of all that offers and then segueing to for-profit when big investment/sales opportunities emerge, and at this point we're making a mockery of everything these classifications are supposed to stand for.

  • javierluraschi 11 hours ago

    Suppose that we open a non-profit to cure cancer, you and a bunch of others give me billions, I cure cancer, great.

    Then plot twist, I turn the non-profit for profit, I avoid releasing the cancer cure I promised and instead I charge you for cure.

    If a non-profit promised to cure cancer to help citizens, I would want that at the very-least they remain non-profit.

  • lmeyerov 11 hours ago

    Fraud, false board oversight, recruiting lies, and other misrepresentations in free markets are bad for everyone in the sense that uncorrupted markets are healthier

    A peculiarity of US law vs others is it follows letter-of-the-law vs spirit-of-the-law. When there is ambiguity that billionaires try to take advantage of, it helps for legislators to pass laws rather than leave it up to judicial interpretation.

    • milesrout 10 hours ago

      >A peculiarity of US law vs others is it follows letter-of-the-law vs spirit-of-the-law.

      This is not close to true. The US legal system has many bizarre quirks (like elected judges, elected prosecutors, and a politicised judiciary) but this isn't one of them. It is a basic requirement of the rule of law that statutes are construed from their text, and not given meaning based on what judges wish their text instead was. People have the right to be able to have some level of certainty about what the law says.

      • lmeyerov 8 hours ago

        I don't think you're disagreeing with me. The US system is letter-of-the-law, we agree there.

        The issue is when there is ambiguity. Judges must then make their own interpretation, and things get murky. In the US, spirit might be used in a hybrid spirit/letter in practice, though ultimately still grounded in literal text. Either way, my point was the role of people in dealing with ambiguity largely goes away when the law gets updated to be clear. Roe v Wade is a popular example of what happens when lawmakers fail to legislate and leave the law up for grabs.

        RE:"Rule of Law", most of Europe is heavier on spirit-of-law. Both the US & EU systems seem historically strong on rule of law, irrespective of their stance on spirit vs letter. I'm not in a position to say being on one side or the other disqualifies a system from being a valid rule of law, that sounds extreme.

valtism 11 hours ago

I really don't see the issue with OpenAI becoming for-profit. They started as a research group with no intention of creating a marketable product, and stumbled onto one. I think it would make sense for them to become for-profit.

  • rubslopes 3 hours ago

    No biggie then; they can become a for-profit when they donate everything they received as a non-profit, both tangible and intangible, with interest.

bcoates 11 hours ago

The system works? The original bill was a going-nowhere, feel-good sop for chumps, the chumps were placated, the bill served its purpose, everyone moved on.

Imagine a world where random crusading busybodies were actually given the power to interfere with every random business deal that made them feel sad, like some sort of HOA for the economy.

  • rocqua 11 hours ago

    The system told people, you are investing in a non-profit. Ut told the outside world 'we are acting as a non profit, for good of humanity.

    Now that the donations are in, the goodwill from users and regulators have been harvested. It seems like open ai is effectively pulling the rug on everyone who acted on the assumption that open ai was a non profit. The system should, generally, prevent rug pulls.

    Besides, the most charitable reading here is "if we can't distribute profits, we can't fund ourselves" which doesn't fit the 100x payput cap. It seems instead a mix of the potential profit being too juicy, and a desire to change course to less ethical operation.

    It certainly isn't obvious the system should allow this. Nor is it obvious this is just 'a business deal'.

  • idle_zealot 11 hours ago

    Yeah, how horrible it would be if people were allowed to decide what was fair or unfair in business based on flighty human emotions. The economy must be run by pure logic as ordained by our betters and the invisible and all-knowing hand of the market. It didn't feel right that a nonprofit could hand over power it promised to steward for the benefit of all to a for-profit company designed to extract value from it, but actually that's just good business and it's more important to let the richest people on Earth do whatever they want than listen to the silly plebeians who want to hold them to their word. If they were in the right surely they'd be the ones running the company valued at $300B.

  • colechristensen 11 hours ago

    >Imagine a world where random crusading busybodies were actually given the power to interfere with every random business deal that made them feel sad, like some sort of HOA for the economy.

    Imagine if... Congress had the power to regulate commerce?

    I really can't tell if you're joking.

    • idle_zealot 11 hours ago

      Disdain for "interference" in the "free market" is a pretty bog-standard viewpoint among Americans. Has been since Reagan. There is a deeply-ingrained view that the market is optimally efficient (for what?) and any attempt to regulate or direct it will result in inefficiency at best, and deep structural problems at worst. This belief is totally free-standing, built on rhetoric alone, and obviously wrong (you literally cannot make a free market, it's not a coherent concept). Policies inspired by this thinking are uniformly disastrous, but all failings are blamed on the remaining regulatory framework and used as pretense to further accelerate wealth accumulation. This pervasive ideology has been eroding the US's capacity to function for decades, and we've finally begun buckling under the weight of the wealth gap it created. I hold no confidence that should we somehow recover that we'll learn our lesson. Perhaps once a few more liberal democracies fall the remaining ones will finally begin to protect themselves.

      • colechristensen 9 hours ago

        No, it was just a snarky garbage comment. You could make the same comment about literally everything the government does comparing it to petty busybody HOA "government", in this case conflating an enumerated power of the US Congress (regulating commerce) with whatever bored HOA rulemaker who wants to fine you for garbage bins or your paint color or whatever other petty nonsense.

      • milesrout 9 hours ago

        >There is a deeply-ingrained view that the market is optimally efficient (for what?) and any attempt to regulate or direct it will result in inefficiency at best, and deep structural problems at worst.

        No the view is that there are some necessary forms of regulatory intervention, some that are harmful, and a grey area where it depends on your priorities (are you optimising for economic growth, or are you optimising for, say, environmental protection at the cost of growth; both are valid.)

        Only a tiny fringe of weirdo anarcho-capitalists think there should be zero government intervention in the economy. Treating any free market liberal as having equivalent views is a ridiculous straw man.

        >This belief is totally free-standing, built on rhetoric alone, and obviously wrong (you literally cannot make a free market, it's not a coherent concept).

        God talk about the irony. You haven't made a single logical argument in your whole post. Your post is pure ideology. Making bare assertions like "you literally cannot make a free market" or "policies inspired by this are uniformly disastrous" isn't an argument. It is unsubstantiated rubbish.

        >Policies inspired by this thinking are uniformly disastrous

        People that say this sort of thing have no idea how horrible life was when everything in society was heavily regulated. Do you have any idea how inefficient goods delivery across the US was before trucking was deregulated? Sadly it didn't get done at the state level to the same extent. The result is that it is now cheaper in many cases to have things delivered from outside your state even though it is further away.

        >and we've finally begun buckling under the weight of the wealth gap it created.

        Nothing is buckling. A "wealth gap" doesn't matter. What matter is absolute levels of wealth. It sounds like you would rather everyone be equally impoverished than for some to be rich and others to be extremely rich.

        The average person today - even the average poor person today - is extraordinarily rich by historical standards. That is entirely because of free markets. This is economic history 101.

    • bcoates 4 hours ago

      California Assembly, and they do have that power, and they just used that power and the answer was "lol no we don't care if you want to waste your own money that's fine"