OpenAI completes its restructuring into a for-profit company

OpenAI has finished a major restructuring that lets it operate as a for-profit business while its nonprofit foundation remains in control.

The shift resolves a year of uncertainty about how the company behind ChatGPT would raise the enormous sums needed to develop AI technology, with the new structure giving it more flexibility to fundraise. OpenAI is currently valued at $500 billion.

Under the new scheme, the nonprofit OpenAI Foundation keeps control of the business, the company said in a blog post, with a 26% stake valued at approximately $130 billion that makes it one of the wealthiest charities in the world.

Microsoft, which has invested more than $13 billion in OpenAI since 2019, gets a 27% stake valued at $135 billion, while the remaining 47% is held by other investors and staff members.

OpenAI said: “The more OpenAI succeeds as a company, the more the non-profit’s equity stake will be worth, which the non-profit will use to fund its philanthropic work.”

Chief executive Sam Altman will not get equity in the restructured company, Bloomberg reported, citing OpenAI.

Under the agreement, Microsoft will retain intellectual property rights for OpenAI’s models and products through 2032, while any announcement by OpenAI that it has reached artificial general intelligence — a long-held goal of the company — must be reviewed by an independent panel of experts.

Microsoft said: “As we step into this next chapter of our partnership, both companies are better positioned than ever to continue building great products that meet real-world needs, and create new opportunity for everyone and every business.”

Microsoft is scheduled to report first-quarter earnings after markets close on Wednesday.

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