Brand Makers
Dil Ka Jod Hai, Tootega Nahin
Microsoft secures $135 billion stake in OpenAI as ChatGPT maker completes major restructuring
Microsoft clarified that it will not have access to OpenAI’s forthcoming hardware products, despite its ongoing collaborations on AI-based technologies.
OpenAI and Microsoft sign an agreement.
Microsoft has finalised a new agreement with OpenAI, giving the tech giant a 27% stake valued at around $135 billion in the ChatGPT maker. The deal coincides with OpenAI’s transition from a non-profit organisation to a public benefit corporation (PBC), marking a significant restructuring of one of the world’s most closely watched artificial intelligence companies.
Under the new corporate framework, OpenAI’s non-profit entity will now operate as the OpenAI Foundation and retain equity worth roughly $130 billion in the for-profit arm, now renamed OpenAI Group PBC. According to OpenAI chairman Bret Taylor, the reorganisation “simplifies the company’s structure” while maintaining the non-profit’s control over the for-profit arm.
“The nonprofit remains in control of the for-profit, and now has a direct path to major resources before AGI arrives,” Taylor said in a blog post.
The agreement also extends Microsoft’s access to OpenAI’s models until 2032 — an extension of its previous deal, which was set to expire in 2030 or upon the company’s achievement of artificial general intelligence (AGI). However, Microsoft clarified that it will not have access to OpenAI’s forthcoming hardware products, despite its ongoing collaborations on AI-based technologies.
In addition, OpenAI has committed to purchasing $250 billion worth of Microsoft Azure cloud services as part of the renewed partnership. Microsoft will, however, lose its right of first refusal to serve as OpenAI’s exclusive compute partner going forward.
A revenue-sharing arrangement between the two companies will remain in effect until an independent expert panel confirms that OpenAI has reached AGI. According to Bloomberg, Microsoft will continue to receive 20% of OpenAI’s revenue under the agreement.
Notably, OpenAI confirmed that CEO Sam Altman will not hold any stake in the newly restructured entity.
The revamped structure marks a turning point for OpenAI, strengthening its ties with Microsoft while providing both entities with a more defined path towards developing and commercialising advanced AI technologies responsibly.
SPOTLIGHT
"The raucous, almost deafening, cuss words from the heartland that Piyush Pandey used with gay abandon turned things upside down in the old world order."
Read MoreThe new face of the browser: Who’s building AI-first browsers, what they do and how they could upend advertising
From OpenAI’s ChatGPT-powered Atlas to Microsoft’s Copilot-enabled Edge, a new generation of AI-first browsers is transforming how people search, surf and interact online — and reshaping the future of digital advertising.