Microsoft to hold $135 billion stake as OpenAI restructures into public benefit corporation

Microsoft to Hold $135 Billion Stake as OpenAI Restructures into Public Benefit Corporation

Microsoft announced on Tuesday that it has reached an agreement with OpenAI to allow the ChatGPT creator to reorganize itself as a public benefit corporation (PBC), a move that positions Microsoft to acquire a 27% stake worth about $135 billion in the AI firm.

Following the announcement, Microsoft’s shares rose 4%, as the deal is expected to pave the way for OpenAI’s potential public listing in the future.

Under the new arrangement, OpenAI will also purchase $250 billion worth of Azure cloud computing services from Microsoft. In return, Microsoft will relinquish its “right of first refusal” to exclusively provide cloud infrastructure to OpenAI, marking a significant shift in their long-standing partnership.

Previously, Microsoft’s agreement with OpenAI granted it intellectual property (IP) rights over OpenAI’s products and models until 2030, or until the company achieved artificial general intelligence (AGI). The tech giant said these rights have now been extended to 2032, and will remain valid even if an independent panel confirms that OpenAI has reached AGI before then.