OpenAI completes corporate reorganization with support from Microsoft

OpenAI has completed its long, drawn-out reorganization into a public benefit corporation, the company announced today in a blog post attributed to board of directors chair Bret Taylor. As part of the reorg, OpenAI’s nonprofit, now called the OpenAI Foundation, will retain control of OpenAI’s for-profit division and hold an equity stake in the company valued at approximately $130 billion. According to Taylor, the Foundation will gain additional control over the for-profit once it reaches an unspecified “valuation milestone.”      

Today’s announcement wouldn’t have been possible without acquiescence from Microsoft, which before OpenAI recently raised more startup capital, held a 32 percent stake in the company’s for-profit unit. In blog post it published alongside OpenAI, the tech giant said it would have a 27 percent stake in the new PBC, valued at approximately $135 billion.  

Before OpenAI and Microsoft signed a memorandum of understanding in September, negotiations between the two organizations were reported to be tense, with Microsoft showing signs it was drifting away from OpenAI by working more closely with Anthropic to integrate its Claude models into Copilot 365. Now that there’s an agreement in place, it appears both sides made some notable compromises.

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This article originally appeared on Engadget at https://www.engadget.com/ai/openai-completes-corporate-reorganization-with-support-from-microsoft-133109385.html?src=rss