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.
158 Articles
158 Articles
OpenAI completes restructure as for-profit company
OpenAI completed its conversion into a for-profit company on Tuesday, clearing a major obstacle for a potential initial public offering. The long-awaited move — which pushed its partner Microsoft to a valuation above $4 trillion — follows a lengthy legal saga and brings a more traditional corporate structure to the startup. Similar to its rivals Anthropic and xAI, OpenAI now operates as a for-profit “public benefit corporation,” designed to crea…
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Microsoft holds 27% of OpenAI in revamped partnership
Microsoft and OpenAI announced Tuesday a sweeping overhaul of their landmark artificial intelligence (AI) partnership, giving both companies greater independence while maintaining their close collaboration.
Microsoft will now hold 27% of OpenAI, the company has the origin of ChatGPT. The American giant thus extends until 2032 a technological partnership that became central in the global race for artificial intelligence.
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