Openai announced Thursday that it has entered into an unbinding agreement with its largest investor, Microsoft, that would allow the company to convert its for-profit institutions into public welfare companies (PBCs).
If the national regulator clears the transition, it can allow Openai to raise additional capital from investors and eventually become a public company.
exist Blog posts, OpenAI’s nonprofit will continue to exist and retain control over the startup’s business, Bret Taylor, chairman of the Openai board, said OpenAI’s nonprofit will continue to exist and retain control of the startup’s business. Under the non-binding agreement, OpenAI’s non-profit will acquire shares in the company PBC, worth more than $100 billion.
“Microsoft and Openai have signed a non-binding memorandum of understanding (MOU) for our next phase,” the companies said in a joint collaboration. statement. Moss is not legally binding, but aims to record the expectations and intentions of the parties.
“We are actively working to finalize the terms of the contract in the determined determination,” the joint statement added.
This development appears to mark several months of negotiations between Openai and Microsoft in Chatgpt-Maker’s transition plan.
Based on the current deal, Microsoft should have priority access to the startup’s technology and become the main provider of OpenAI’s cloud services. But Chatgpt’s business was much bigger when Microsoft first invested in the startup in 2019, and Openai reportedly tried to relax control of cloud providers as part of those negotiations.
Taylor said OpenAI and Microsoft “continue to work with the attorney generals of California and Delaware” in the transition plan, meaning the deal still requires regulatory approval to take effect.
Representatives of the California and Delaware Attorney General did not immediately respond to TechCrunch’s request for comment.
Tensions in Openai and Microsoft over these negotiations have been reported to have reached a boiling point in recent months. Wall Street Journal Microsoft wants to control Windsurf, an AI-coded startup that Openai plans to acquire earlier this year, and Openai strives to make the startup’s technology independent. However, the deal failed, the founder of Windsurf was hired by Google and the rest of the employees were recognized.
The startup’s for-profit transition is also a major shining point in Elon Musk’s lawsuit against OpenAI. Attorneys representing Musk’s lawsuit (which at its core accused Ultraman, Greg Brockman and the company that abandoned its nonprofit mission) tried to surface information about the transitional negotiations between Microsoft and Openai.
Musk also submitted a $97 billion OpenAI acquisition bid earlier this year, and the startup’s board quickly refused. But legal experts pointed out at the time that Musk may have raised the price of Openai nonprofit shares.
Taylor said it is worth noting that the nonprofit’s stake in Openai PBC is larger than the one offered by Musk.
This is a development story…please check out the update.
