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.

Chris Stokel-Walker

Bot bias

6/17/26

Companies are getting AI chatbots to smear their competitors

The race to influence AI chatbots is leading to some companies to adopt shady competitive tactics.

Tom Jones6/17/26

Prediction markets have, predictably, been given a boost by the summer of sports

Major platforms like Kalshi and Polymarket have seen huge upticks in users of late, thanks in no small part to what’s felt like a recent sporting smorgasbord, with major competitions across hockey, basketball, and soccer soaking up fans’ time (and spending, clearly) at the outset of summer.

While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

2026 World Cup Reverses Seasonal Lull for Sports Betting Apps

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

South by Southwest Conference and Festivals

Gold Tesla Cybercabs are piling up, but they’re not picking up passengers yet

Low-volume production started in April. Now people are noticing them more and more in the wild.

Rani Molla6/15/26

Millie Giles

TAKING ACCOUNTS

6/15/26

Britain announces social media ban for under-16s starting early 2027

The UK government plans to use the same model for the restrictions as Australia — but how successful has that case study been so far?

UK Prime Minister Announces Under-16s Social Media Ban

Jon Keegan6/15/26

Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5