OpenAI has struck a nonbinding deal with Microsoft to convert its for-profit business into a public benefit corporation (PBC), a move that could eventually let the ChatGPT maker raise new capital and pursue a public listing.
Why it matters:
- The restructuring aims to ease investor concerns over OpenAI’s unusual governance model, which has long complicated fundraising.
- The nonprofit entity that currently controls OpenAI will keep its authority and secure a stake in the new PBC worth more than $100 billion.
- Transitioning to a PBC could open the door to broader financing options, while still keeping OpenAI’s mission-driven framework intact.
Microsoft and OpenAI signed a memorandum of understanding, laying out intent but not binding terms.
Regulators in California and Delaware still need to review the plan before it can move forward. Microsoft remains the primary cloud partner, but OpenAI has diversified — striking a $300 billion Oracle deal (starting 2027) and partnering with SoftBank on its Stargate data centre project.
OpenAI's tough spots
- Tensions between OpenAI and Microsoft have flared in recent months, including a collapsed deal for AI startup Windsurf.
- OpenAI’s board structure famously led to Sam Altman’s ouster and quick return in 2023.
- Elon Musk, once an OpenAI backer, is suing the company, accusing it of abandoning its nonprofit mission. He even attempted a $97 billion takeover earlier this year, which failed.
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