A major OpenAI corporate restructuring is underway as the company has reached a nonbinding agreement with its largest investor, Microsoft, to transition its for-profit arm into a public benefit corporation (PBC). The deal announced on Thursday ,could pave the way for OpenAI to raise more capital and eventually go public and marking a pivotal new chapter for the $100 billion AI powerhouse’s OpenAI corporate restructuring.
Crucially, the OpenAI corporate restructuring memorandum ensures the company’s current governance structure will be preserved. The company’s nonprofit board will retain control over operations and hold a stake in the new PBC entity. According to board chairman Bret Taylor, the new entity is valued at over $100 billion. While the high-level agreement is in place, both companies stated that they are now working to finalize the specific contractual terms.
This development follows a months of negotiation along with well-documented tension between OpenAI and Microsoft, regarding control over OpenAI’s valuable technology and intellectual property. Microsoft has long benefited from privileged access to OpenAI’s models, but the AI lab is now taking steps to assert its strategic independence. A prime example is its recent $300 billion cloud deal with Oracle, a clear effort to diversify beyond Microsoft’s ecosystem.
Before the transition can be finalized, it must receive regulatory approval from authorities in California and Delaware, which is a critical step for both companies before commitment. The move also comes, as OpenAI navigates external pressures, including a high-profile lawsuit from Elon Musk and other disputes over its founding mission. This transition to a PBC may be a strategic attempt to balance its social mission with its immense capital needs, potentially setting a new precedent for how future AI giants are structured.
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