OpenAI has secured a pivotal partnership with Microsoft, allowing it to convert into a public benefit corporation (PBC) and attract new investments. This arrangement follows 18 months of operational turmoil and regulatory challenges. Microsoft will own approximately 27% of OpenAI Group PBC, translating to about $135 billion. Despite never turning a profit, the market values OpenAI at $500 billion. The deal mandates OpenAI to spend $250 billion on Azure services while granting it access to US national security APIs without Azure constraints. Microsoft retains exclusive IP rights and will remain its designated partner until OpenAI achieves Artificial General Intelligence (AGI). Controversially, Public Citizen has called for regulatory scrutiny, arguing that OpenAI’s nonprofit obligations are unfulfilled. Despite this, California Attorney General Rob Bonta supported the recapitalization plan, citing negotiated concessions to ensure charitable commitments are upheld. CEO Sam Altman presented the restructuring as a simplification of OpenAI’s complex structure.
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