Author: Hayden Field
Microsoft Chairman and Chief Executive Officer Satya Nadella (L), speaks with OpenAI Chief Executive Officer Sam Altman, who joined by video during the Microsoft Build 2025 conference.
OpenAI’s controversial for-profit restructuring is finally complete, along with a new deal with Microsoft.
The company’s for-profit arm is now a public benefit corporation, dubbed OpenAI Group PBC. The nonprofit is now called the OpenAI Foundation and “holds equity in the for-profit currently valued at approximately $130 billion” — it will begin with a $25 billion focus on healthcare and disease and “AI resilience,” per OpenAI’s blog post. The nonprofit will also get “additional ownership” after OpenAI’s for-profit reaches an unspecified valuation milestone.
The news comes after more than a year of OpenAI’s negotiations with the offices of the Attorneys General of California and Delaware — if they hadn’t eventually blessed the restructuring, OpenAI wouldn’t have been able to move forward. It also follows a thorny and drawn-out legal battle with Elon Musk, who has been suing both the company and CEO Sam Altman in attempts to stop the conversion. Musk co-founded OpenAI in 2015 as a nonprofit research lab.
In recent months, the company switched its original plan — a for-profit conversion where the nonprofit would no longer be in control of any aspect of the rest of the company — to an adjusted one, under which OpenAI’s nonprofit parent will own an equity stake of up to $100 billion and continue to have oversight over the company.
If OpenAI didn’t announce the completed restructuring by New Year’s Eve, it could have lost up to $10 billion of its previously announced SoftBank investment.
The company will host a livestream Q&A at 1:30pm ET with Altman and OpenAI chief scientistJakub Pachocki.
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Microsoft Chairman and Chief Executive Officer Satya Nadella (L), speaks with OpenAI Chief Executive Officer Sam Altman, who joined by video during the Microsoft Build 2025 conference.
OpenAI’s controversial for-profit restructuring is finally complete, along with a new deal with Microsoft.
The company’s for-profit arm is now a public benefit corporation, dubbed OpenAI Group PBC. The nonprofit is now called the OpenAI Foundation and “holds equity in the for-profit currently valued at approximately $130 billion” — it will begin with a $25 billion focus on healthcare and disease and “AI resilience,” per OpenAI’s blog post. The nonprofit will also get “additional ownership” after OpenAI’s for-profit reaches an unspecified valuation milestone.
The news comes after more than a year of OpenAI’s negotiations with the offices of the Attorneys General of California and Delaware — if they hadn’t eventually blessed the restructuring, OpenAI wouldn’t have been able to move forward. It also follows a thorny and drawn-out legal battle with Elon Musk, who has been suing both the company and CEO Sam Altman in attempts to stop the conversion. Musk co-founded OpenAI in 2015 as a nonprofit research lab.
In recent months, the company switched its original plan — a for-profit conversion where the nonprofit would no longer be in control of any aspect of the rest of the company — to an adjusted one, under which OpenAI’s nonprofit parent will own an equity stake of up to $100 billion and continue to have oversight over the company.
If OpenAI didn’t announce the completed restructuring by New Year’s Eve, it could have lost up to $10 billion of its previously announced SoftBank investment.
The company will host a livestream Q&A at 1:30pm ET with Altman and OpenAI chief scientistJakub Pachocki.
Developing…
Continue reading...