A restructuring of OpenAI should enable billions in investments without losing control.
OpenAI is working on a restructuring that should pave the way for becoming a publicly listed company. Therefore, the company is in talks with Microsoft, its largest investor, to rewrite the terms of their collaboration.
Since 2019, Microsoft has invested over $13 billion in OpenAI and currently holds a significant stake in the company’s commercial arm. In return, it gets access to OpenAI’s models such as GPT-4 and future AI systems. According to insiders, Microsoft would be willing to give up part of its shares if it continues to have access to new technology after the current contract expires.
From non-profit to public benefit
OpenAI was founded in 2015 as a non-profit, but gained a commercial arm with a ‘capped profit’ structure in 2019. This limited profit distribution to investors but makes it difficult to raise large amounts. Therefore, OpenAI wants to switch to a structure as a ‘public benefit corporation’, like competitors Anthropic and xAI.
When will the deal be finalized?
The negotiations with Microsoft are crucial. Without an agreement, OpenAI’s restructuring would be delayed and future funding rounds would be at risk. At the same time, the plans need to be approved by regulators in California and Delaware. OpenAI is confident of a positive outcome, but also faces criticism. For example, from co-founder Elon Musk, who claims that the company is undermining its mission in favor of profit.