Microsoft and OpenAI have entered into a new agreement that may facilitate the AI startup’s anticipated public listing. OpenAI, recently valued at $500 billion, is restructuring its nonprofit model to align with its evolving business goals. In a joint statement issued on Thursday, both companies announced advancements in the “next phase” of their collaboration. They have signed a non-binding memorandum of understanding (MOU) and are working to finalize the contractual terms in a definitive agreement. Their focus remains on providing the best AI tools for all, underpinned by a mutual commitment to safety. Since 2019, Microsoft has invested $13 billion in OpenAI and continues to gain from revenue sharing linked to ChatGPT and its API.
However, the dynamics of their relationship have become more intricate as OpenAI broadens its cloud partnerships and Microsoft increases its dependence on its own AI models. During a company town hall, Microsoft CEO Satya Nadella and AI chief Mustafa Suleyman highlighted plans for “significant investments” in internal development. Suleyman mentioned, “We should have the capacity to build world-class frontier models in house of all sizes, but we should be very pragmatic and use other models where we need to.” OpenAI also revealed that its nonprofit parent organization will retain authority over the for-profit branch, holding an equity stake valued at over $100 billion. Despite these advancements, OpenAI’s restructuring strategy has faced criticism.
Several philanthropies and nonprofits have raised concerns, and the attorneys general of California and Delaware have launched inquiries into the company’s governance framework. In its announcement, OpenAI stated, “We continue to engage with the California and Delaware Attorneys General as a vital aspect of enhancing our approach, and we remain dedicated to learning and acting swiftly to ensure our tools are beneficial and safe for all, while prioritizing safety across the industry.”
