OpenAI has completed a long-awaited corporate recapitalisation that hands its nonprofit arm a large equity stake in the company, while also giving major shareholder Microsoft Corp (NASDAQ:MSFT) an extra boost to reach a $4 trillion market valuation.
OpenAI and Microsoft also announced the "next chapter" of their partnership will see a loosening of exclusivity, adding new provisions that enable each company to independently continue advancing innovation and growth.
The stake owned by the nonprofit arm, the newly renamed OpenAI Foundation, is worth an estimated $130 billion.
The ChatGPT developer said the move simplifies OpenAI’s structure while reaffirming the Foundation’s control over the for-profit business, now rebranded OpenAI Group PBC, a public benefit corporation.
Microsoft's investment in the PBC is valued at approximately $135 billion, representing roughly 27% on an as-converted diluted basis, inclusive of all owners.
Excluding the impact of OpenAI’s recent funding rounds, Microsoft's stake stands at 32.5%.
The new provisions of the Microsoft partnership give the Windows company extended intellectual property rights over OpenAI models and products through 2032, including those developed if artificial general intelligence (AGI) is declared, provided safety guardrails are in place. This includes a requirement that an independent panel must now verify if OpenAI claims it has built AGI.
While it retains key rights to model architecture, training code, and other non-research IP, Microsoft's access to OpenAI’s confidential research methods will end once AGI is independently verified or by 2030.
Microsoft can now independently pursue AGI development with other partners, and OpenAI is no longer required to use Azure as its exclusive compute provider, though it has committed to an additional $250 billion in Azure spend.
OpenAI said the Foundation will deploy an initial $25 billion across two areas: advancing medical breakthroughs through open health data and research funding; and developing infrastructure to improve AI resilience.
The restructuring follows nearly a year of dialogue with the offices of the attorney general offices in California and Delaware, and, according to OpenAI, "maintains the strongest representation of mission-focused governance in the industry today".