OpenAI and Microsoft Reach Non-Binding Agreement on Partnership Restructuring

OpenAI and Microsoft have signed a non-binding memorandum of understanding (MOU) to revise their partnership, enabling OpenAI to restructure its for-profit arm into a public benefit corporation (PBC). This transition aims to allow OpenAI to raise additional capital and potentially pursue a public listing.

Under the proposed agreement, OpenAI's nonprofit parent will retain control over the organization and hold an equity stake exceeding $100 billion.

The restructuring plan requires approval from regulators in California and Delaware. Both companies are actively working to finalize the contractual terms in a definitive agreement.

This development follows months of negotiations between OpenAI and Microsoft over the terms of their partnership. Microsoft, which has invested over $13 billion in OpenAI since 2019, is reportedly considering adjustments to its equity stake in exchange for extended access to OpenAI's technologies beyond the current agreement, which expires in 2030.

OpenAI has also been diversifying its partnerships, including a nearly $12 billion contract with CoreWeave to supply computing power for AI model training and operations over the next five years.

The restructuring plan has faced criticism from some charitable organizations urging regulators to reject the agreement.

Representatives for the California and Delaware attorneys general did not immediately respond to requests for comment.