Microsoft CEO Satya Nadella (R) greets OpenAI CEO Sam Altman during the OpenAI DevDay event

(Justin Sullivan/Getty Images)

OpenAI completes its restructuring, now controlled by a $130 billion nonprofit

The complex corporate transformation clears the way for an inevitable IPO and creates one of the most well-funded nonprofits in the world.

Jon Keegan

10/28/25 11:10AM

OpenAI has completed its long-awaited corporate restructuring, emerging as a for-profit public benefit corporation (valued at $500 billion) controlled by a smaller nonprofit that instantly became one of the most well-funded philanthropies in the world.

The nonprofit (OpenAI Foundation) now holds $130 billion in equity in the for-profit company (OpenAI Group PBC), and that could grow further after a “valuation milestone,” according to the announcement.

OpenAI completed the transformation before a year-end deadline that could have blown up its strained partnership with Microsoft and risked losing a $20 billion investment from Stargate partner SoftBank.

Shares of Microsoft rallied after the announcement.

Microsoft and OpenAI jointly put out a statement saying Microsoft supported the new structure. They also laid out some new terms of the deal and described some dilution of Microsoft’s equity stake in the company:

“Following the recapitalization, Microsoft holds an investment in OpenAI Group PBC valued at approximately $135 billion, representing roughly 27 percent on an as-converted diluted basis, inclusive of all owners — employees, investors, and the OpenAI Foundation. Excluding the impact of OpenAI’s recent funding rounds, Microsoft held a 32.5 percent stake on an as-converted basis in the OpenAI for-profit.”

The Microsoft press release lists many new details of the partnership, which at times seemed to be doomed as the companies argued over various issues. Here are some of the key details:

One point of contention was a trigger for renegotiation that would be initiated in the case that OpenAI achieves artificial general intelligence (AGI), an amorphous target if there ever was one. The new terms state that an independent expert will verify any declaration of OpenAI achieving AGI.
Microsoft’s intellectual property rights for OpenAI’s models and products now extend to 2032, including any models created post-AGI, but excludes any consumer hardware products that OpenAI develops (like the gadget Jony Ive’s team is working on).
Microsoft will keep its research IP rights (defined as “the confidential methods used in the development of models and systems”) until 2030, or the verification of a claim of AGI, whichever comes first.
OpenAI is free to develop “some products” with third parties, but API products must use Microsoft’s Azure cloud services.
Microsoft is now free to pursue AGI on its own, or with partners.
The companies’ revenue-sharing agreement remains in place until verification of AGI.
OpenAI will buy $250 billion worth of Azure services, and Microsoft gives up its right of first refusal to be OpenAI’s computing provider.
OpenAI is free to offer US government and national security customers API access, regardless of cloud provider.
OpenAI can now release open-weight models.

Founded in 2019, the newly flush OpenAI Foundation will dedicate an initial $25 billion to research health and curing disease, and will work on a “resilience layer” for AI to beef up cybersecurity and minimize risks for the technology.

With this restructuring secured, OpenAI is now potentially positioned for an IPO, which would help the company raise the $1 trillion it needs to meet its commitments to the flurry of deals it has signed this year.

Rani Molla16m

Lyft and Uber jump after announcing expanded robotaxi partnerships with Nvidia

Uber and Lyft both announced expanded AI and autonomous vehicle partnerships with Nvidia at the company’s GTC event, sending both ride-hailing stocks up after-hours.

Uber was recently up 3.3%, while Lyft rose 3%.

Uber said Nvidia-powered Level 4 robotaxis will launch on its platform in Los Angeles and San Francisco in 2027, with plans to scale to 28 cities globally by 2028. Meanwhile, Lyft said it will use Nvidia’s AI infrastructure to improve ride-matching, mapping, and efficiency, while also using Nvidia’s DRIVE Hyperion platform as a foundation for future autonomous fleets.

Separately, Nvidia announced expanded autonomous driving partnerships with Kia and Hyundai.

The announcements highlight Nvidia’s growing push to provide the AI hardware and software powering next-generation robotaxi networks — packaging the technology needed for self-driving cars into a platform that other companies can use to compete with Tesla.

Rani Molla3h

Tesla’s Robotaxi program has disclosed its 15th accident, Electrek reports, citing the latest filing from the National Highway Traffic Safety Administration. According to Electrek’s estimation, extrapolated from the last time Tesla disclosed mileage figures, that amounts to a crash every 57,000 miles — about 9x the rate for humans.

The latest crash involved a Model Y hitting a fixed object at 9 mph in January while the autonomous system was engaged.

Humans are very much still involved with Tesla’s so-called autonomous driving service. Despite the service announcing in January that it had started removing safety monitors from the front seats, only two unsupervised vehicles have been spotted in the last month, per Robotaxi Tracker. The entire fleet has also dwindled from around 50 vehicles to just 35. Their mileage is unavailable.

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Meta’s reported 20% layoff could bring headcount to its lowest level since 2021

Meta is rising Monday morning after Reuters reported the tech giant is planning to lay off 20% of its employees in an effort to use AI to make its workforce more efficient and offset its surging AI capex costs.

On the company’s last earnings call, CEO Mark Zuckerberg touted 30% efficiency gains for its software engineers and said some “power users” of the company’s AI coding tools saw productivity jump as high as 80% — what some saw as a veiled threat to employees who failed to use AI to boost their output.

Meta’s headcount was nearly 79,000 last quarter, having steadily risen since its layoffs during the self-described “year of efficiency” in 2023. A 20% cut would bring headcount to around 63,000 — the company’s lowest level since 2021.

Shares were recently up 2.7%.

Exclusive: Meta planning sweeping layoffs as AI costs mount

Shares were recently up 2.7%.

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What we know about Tesla’s Terafab project, which Musk says is launching in a few days

Elon Musk says the goal is to produce 100 billion to 200 billion AI chips a year.

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Report: Amid safety failures, ChatGPT’s planned “adult mode” caused concern within OpenAI, with minors misclassified as adults 12% of the time

Despite a series of alarming mental health safety failures that resulted in ChatGPT users allegedly using the product to plan suicides and murder, OpenAI decided to double down on its plan to roll out an “adult mode,” allowing the AI chatbot to produce erotic content.

That decision raised alarms within the company, warning that users could develop unhealthy emotional dependence on the chatbot and that the new age estimation feature was imperfect — and therefore likely to allow minors to access the feature — according to a new report from The Wall Street Journal. Per the report, some 12% of the time, the age estimation feature mistakenly classified minors as adults.

OpenAI’s council of mental health experts were “furious” and unanimous in their opposition to the plans to move forward with the adult mode feature after they were told about the decision in January, with concerns about creating a “sexy suicide coach.”

Earlier this month, the company said it would delay the new feature to focus on other products.

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