OpenAI Restructures, Microsoft Retains Stake

OpenAI and Microsoft have reached a landmark deal to restructure OpenAI into a public benefit corporation, valuing the ChatGPT maker at $500 billion. This agreement removes previous constraints on OpenAI's ability to raise capital and secure computing resources, which had caused tension between the companies since their 2019 partnership. Microsoft will retain a 27% stake in OpenAI Group PBC, valued at $135 billion, and has secured a deal for OpenAI to purchase $250 billion in Microsoft — Microsoft Azure cloud computing services. In return, Microsoft has relinquished its right of first refusal to be OpenAI's sole compute provider and its rights to consumer hardware produced by OpenAI. Sam Altman, CEO of OpenAI, will not receive equity in the restructured company, but the deal solidifies his authority and provides a clearer path for OpenAI's ambitious plans, including potential data center development and a future public offering. The partnership is cemented until at least 2032, with provisions for an independent panel to verify when OpenAI reaches artificial general intelligence (AGI).