OpenAI secures Microsoft’s blessing to transition its for-profit arm

OpenAi announced on Thursday that it reached a non-binding agreement with Microsoft, the largest investor, on a revised partnership with which the startup could convert its for-profit arm into a public benefit company (PBC).

The transition, if it is cleaned up by state rulers, can allow OpenAI to attract extra capital from investors and eventually become a public company.

In one Blog post, OpenAI Board chairman Bret Taylor said under the non-binding agreement with Microsoft, the non-profit of OpenAi would continue to exist and maintain control of the activities of the startup. The non -profit of OpenAi would get an interest in the company’s PBC worth $ 100 billion, Taylor said. Further conditions of the deal were not announced.

“Microsoft and OpenAi have signed a non-binding memorandum of agreement (MOU) for the next phase of our partnership,” the companies said in a joint rack. Mous are not legally binding, but are intended to document the expectations and intention of each party.

“We work actively to complete contractual conditions in a final agreement,” added the joint statement.

The development seems to put an end to months of negotiations between OpenAI and Microsoft about the transition plans of the Chatgpt maker. In contrast to most startups, OpenAI is driven by a non -profit board. The unusual structure allowed OpenAi board members to dismiss CEO Sam Altman in 2023. Altman was restored days later and many of the board members resigned. However, the same board structure remains present today.

Under their current deal, Microsoft is supposed to be preferred to be the technology of OpenAi and the primary provider of cloud services of the startup. However, Chatgpt is a much larger company than when Microsoft invested in the startup for the first time in 2019, and OpenAi reportedly tried to separate the control of the cloud provider as part of these negotiations.

In the past year, OpenAI has concluded a series of deals that would be less dependent on Microsoft. OpenAi recently signed a contract to spend $ 300 billion with cloud provider Oracle According to the Wall Street Journal for a period of five years starting in 2027. OpenAi is also working with the Japanese conglomerate Softbank in its Stargate Data Center project.

Taylor says that OpenAi and Microsoft “will continue to work with the California and Delaware Attorneys General” on the transition plan, which implies that the deal still needs a stamp of approval from supervisors before it can get in force.

Representatives of the lawyers of California and Delaware did not immediately respond to WAN’s request for comment.

Tensions between OpenAI and Microsoft about these negotiations have reportedly reached a boiling point in recent months. The Wall Street Journal Reported Microsoft wanted control over technology owned by Windsurf, the AI ​​-coding startup that opened OpenAi to acquire earlier this year, while OpenAi moisture to keep the IP independent of the startup. However, the deal fell on and the founders of Windsurf were hired by Google, and the rest of his staff were taken over by another startup, cognition.

In the lawsuit of Elon Musk against OpenAi-Die in the core Sam Altman, Greg Brockman, and the company accuses his non-profit mission-is the transition from the startup also an important flash point. Lawyers who represent Musk in the court case have tried to train information with regard to the negotiations of Microsoft and OpenAi about the transition.

Earlier this year, Musk also submitted an unsolicited bid of $ 97 billion for OpenAI, which the board immediately rejected from the startup. At the time, legal experts noted that the bid of Musk has increased the prize of OpenAi’s Non -profit importance.

In particular, the importance of the non -profit in OpenAI PBC, under this agreement, is greater than what Musk offered.

In recent months, non-profit organizations such as ENCODE and the Midas project have had problems with the transition from OpenAI’s for-profit, and claims that it threatens the mission of the startup to develop Agi that benefits humanity. OpenAi has responded by sending summons of some of these groups, Claim that the non -profit organizations are financed by its competitors – namely Musk and Meta CEO Mark Zuckerberg. Coding and the Midas project refuse the claims.