US EditionMicrosoft, OpenAI reach new deal to allow OpenAI to restructure
- On Oct 28, OpenAI completed its recapitalization, creating a for-profit entity within a non-profit foundation, and Microsoft will hold roughly 27% of OpenAI Group, valued at about $135 billion.
- Operating constraints and fundraising needs pushed the change as OpenAI's nonprofit equity limits became untenable, governance tensions including the November 2023 board episode exposed instability, and Softbank's $30 billion conditional investment increased pressure to restructure.
- Under the new legal structure, the OpenAI Foundation will control OpenAI Group, own 26% of the for-profit, require AGI claims be verified independently, and commit to $250B of Azure services.
- Microsoft shares reacted, rising 2.5 per cent, with its market value surpassing $4 trillion, while Altman scheduled a livestream amid ongoing inquiries from California and Delaware attorneys general.
- The agreement binds the firms through at least 2032 via cloud and rights arrangements, allowing Microsoft to pursue AGI alone or with partners amid ChatGPT's more than 700 million weekly users.
212 Articles
212 Articles
'Close eye' will be kept on OpenAI's for-profit conversion, says California's attorney general
The company also announced that Microsoft - a long-time backer of OpenAI - will now hold a roughly 27% stake in its new for-profit corporation, a slightly bigger share than OpenAI's own nonprofit.
Microsoft and OpenAI are transforming their multi-billion-dollar partnership into a so-called Public Benefit Corporation (PBC), as the two US companies announced on Tuesday. "What began as an investment in a research company has now become one of the most successful partnerships in our industry," Microsoft and OpenAI explained. Now a new phase is starting. Microsoft is holding a stake of around $135 billion after the change in name, which repres…
Microsoft CEO Satya Nadella says Bill Gates warned him that investing in OpenAI would be like setting $1 billion on fire
Microsoft made its first investment of $1 billion in OpenAI back in 2019. - The company went on to invest over $13 billion in the ChatGPT maker. - Microsoft CEO Satya Nadella said Bill Gates was initially wary of investing in OpenAI. Microsoft's early investments in OpenAI may seem like a…
ChatGPT owner sets eyes on making profits, clears road to a potential IPO; Microsoft gains
OpenAI is categorically going to be soon turning into a corporate structure. To align with CEO Sam Altman's vision of creating an edge-cutting technology, OpenAI and Microsoft have led a deal on Tuesday that allows ChatGPT to go public for its financial use.
Bill Gates Told Satya Nadella 'You're Going To Burn This Billion Dollars' By Investing In OpenAI — But Microsoft's Bet Became A 100-Bagger - Microsoft (NASDAQ:MSFT)
Bill Gates once warned Satya Nadella that Microsoft's $1 billion OpenAI investment could go up in flames, but that risky bet has now turned into a $135 billion stake cementing the company's dominance in the global AI race.
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