OpenAI Set to Transform into For-Profit Entity with Microsoft's Backing
Microsoft, the influential AI research and deployment company, is set to undergo a significant restructuring. Microsoft has provisionally agreed to renegotiate their partnership, paving the way for OpenAI to transform into a for-profit entity. The non-profit parent organization is expected to receive a substantial stake in the company, valued at over 100 billion USD.
The new structure will see OpenAI's non-profit holding more than 20 percent of the for-profit company. This shift comes after Microsoft provisionally restructured their previous partnership agreement, a key step in the planned reorganization. The new contract aims to renegotiate financial conditions, technology sharing, and revenue sharing between the two companies.
OpenAI's transformation follows a recent secondary sale that valued the organization at 500 billion USD. Bret Taylor, chairman of the OpenAI board, has described the organization as one of the 'best-equipped philanthropic organizations in the world'. To support its mission, OpenAI has announced a funding program of 50 million USD for non-profit and local organizations.
The long-controversial AGI clause remains part of the agreement, though details of its modification have yet to be published. Microsoft's investment in OpenAI between 2019 and 2023 totals more than 13 billion USD, securing around 49 percent of future profits. As OpenAI repositions itself as a for-profit company, it aims to balance its mission with financial sustainability, supported by its partnership with Microsoft.
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