Microsoft to now hold $135 billion stake in OpenAI as ChatGPT maker completes restructure

Microsoft and OpenAI have finalized a new agreement which would give the Windows maker a 27% stake in the AI startup, which amounts to around $135 billion. Notably, the new stake was revealed as OpenAI announced that it has restructured from a non-profit to a public benefit corporation.

​The ChatGPT maker says that its non-profit would now be called the OpenAI Foundation and would hold equity worth around $130 billion in the for-profit unit. The for-profit arm, which is a public benefit corporation, would be called OpenAI Group PBC.

​Meanwhile, Microsoft would now continue to have access to OpenAI's models until 2032, even if independent experts verify that the ChatGPT maker has achieved AGI. Microsoft's earlier agreement with OpenAI only gave it access to AI models till 2030 or until the startup reached AGI.

​“OpenAI has completed its recapitalization, simplifying its corporate structure. The nonprofit remains in control of the for-profit, and now has a direct path to major resources before AGI arrives,” Bret Taylor, OpenAI's chairman, said in a blog post.

​Microsoft has confirmed in its blog post that it will not have access to the hardware products that OpenAI is building. The company had earlier bought Jony Ive's startup and is confirmed to work on many AI-based products.

​The new agreement also states that OpenAI has agreed to purchase an additional $250 billion of Microsoft Azure services. However, Microsoft would no longer have a right of first refusal to be OpenAI's compute partner.

​In the blog post, both the companies said that a revenue sharing agreement will stay in effect until an expert panel verifies that AGI has been achieved with OpenAI models. Microsoft will receive 20% of OpenAI's revenue, as per a Bloomberg report citing anonymous sources.

​OpenAI's restructuring effort was under review by the California and Delaware Attorneys General. Delaware AG Kathy Jennings, after the announcement, said that she has decided not to object to the restructuring.

​"This was a long and intensive negotiation—but I am pleased that OpenAI committed to a governance structure going forward that requires primacy for safety and security, and to utilize this technology and this corporation’s resources to benefit the public," Jennings said in a statement.

​“These reforms are designed to help this technology realize its extraordinary potential to benefit humanity—from unlocking unprecedented access to information for underserved communities, to accelerating advances in scientific and medical research—rather than to harm it,” she added.

​The Bloomberg report, while quoting OpenAI, says that the company's CEO Sam Altman would not have any stake in the newly restructured entity.