OpenAI and Microsoft reach agreement that moves OpenAI closer to for-profit status
In a joint statement, OpenAI and Microsoft announced a “non-binding memorandum of understanding” for their renegotiated $13 billion partnership, which was a source of recent tension between the two companies.
Settling the agreement is a requirement to clear the way for OpenAI to convert to a for-profit public benefit corporation, which it must do before a year-end deadline to secure a $20 billion investment from SoftBank.
OpenAI also announced that the controlling nonprofit arm would hold an equity stake in the PBC valued at $100 billion, which would make it “one of the most well-resourced philanthropic organizations in the world.”
The statement read:
“This recapitalization would also enable us to raise the capital required to accomplish our mission — and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact.”
Settling the agreement is a requirement to clear the way for OpenAI to convert to a for-profit public benefit corporation, which it must do before a year-end deadline to secure a $20 billion investment from SoftBank.
OpenAI also announced that the controlling nonprofit arm would hold an equity stake in the PBC valued at $100 billion, which would make it “one of the most well-resourced philanthropic organizations in the world.”
The statement read:
“This recapitalization would also enable us to raise the capital required to accomplish our mission — and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact.”
