Advertisement
OpenAI said on Thursday that it has a new plan with Microsoft. They want to turn OpenAI’s for-profit business into something called a Public Benefit Corporation. This could make it easier for OpenAI to bring in fresh money and maybe even go public in the future.
Bret Taylor, the Chairman of OpenAI’s board, explained in a blog post that the nonprofit parent will stay in control. The nonprofit will also own a very large stake in the new setup. Reports say that stake could be worth over one hundred billion dollars. Not many other details have been shared yet.
OpenAI and Microsoft said they have signed an early agreement but it is not final. Both sides are still working on the legal details. Regulators in California and Delaware need to approve the change before it becomes official. If that happens, OpenAI will be able to raise money more freely but the nonprofit will still have power over big decisions. The setup is unusual. It is the same system that once allowed the board to remove Sam Altman as CEO in 2023 before bringing him back a few days later.
Right now, Microsoft has special access to OpenAI’s technology and provides the main cloud services. But OpenAI has grown fast since Microsoft first invested in 2019. The company has started to look elsewhere too. It has a three hundred billion dollar cloud deal with Oracle that begins in 2027. It has also joined hands with SoftBank to work on a huge new data center project called Stargate.
Talks between Microsoft and OpenAI have not always been smooth. Microsoft was interested in another AI startup called Windsurf, which OpenAI tried to buy earlier this year. That deal failed and Windsurf’s team ended up joining Google and another AI firm called Cognition.
Elon Musk has also added tension. He sued OpenAI, claiming it has strayed from its nonprofit goals. He even made a ninety seven billion dollar offer to take over OpenAI earlier this year. That offer was rejected, but experts believe it affected how much OpenAI’s nonprofit stake is now worth.
Some groups have also criticized the plan. They say turning into a Public Benefit Corporation could make OpenAI focus more on profit and less on its promise to make AI safe for everyone. OpenAI has denied this and says many critics are linked to rivals like Musk and Mark Zuckerberg. Those groups deny that claim.
Taylor said OpenAI and Microsoft are working closely with regulators to get approval. If the deal goes through, the nonprofit will own a stake worth more than Musk’s bid. That could shape the company’s future in a major way as the race in AI keeps moving fast.