OpenAI and Microsoft Reportedly in Talks to Restructure Strategic Partnership
OpenAI and Microsoft are reportedly renegotiating on new terms for their multibillion-dollar partnership. They’re discussing changes to their overall deal. The goal of the renegotiation is to pave the way for OpenAI’s potential future initial public offering (IPO), while ensuring Microsoft keeps access to the latest AI technology like ChatGPT later.
OpenAI recently made a big update to its company restructuring. While it still plans to turn its business side into a for-profit public benefit company(PBC), its nonprofit board will stay in charge and continue to oversee its work.
Moreover, Microsoft, who is OpenAI’s biggest partner and investor having investment of $13 billion so far, plays a key role in approving how the company’s new structure will take shape. Therefore, Microsoft is looking to update its deal with OpenAI to make sure it can keep using future AI models even after their current agreement ends in 2030.
However, Microsoft is open to give some of its ownership in OpenAI’s new for-profit Public Benefit Corporation(PBC) in exchange for long-term access to its technology beyond 2030 according to the Financial Times. But the main point of the talks is how much ownership Microsoft will get in OpenAI’s new for-profit company in return for its $13 billion investment.
Back in 2019, Microsoft invested $1 billion in OpenAI, which helped kickstart their long-term partnership. That partnership deepened the relation between both. But recently tensions have grown. Microsoft insiders say OpenAI is becoming harder to work with and too demanding. Additionally, OpenAI plans to decrease the revenue share it provides to Microsoft from 20% to 10% by the end of the decade.
Now, with OpenAI growing fast and thinking about going public in the future, both companies are reworking that original deal. The restructuring aims to align OpenAI’s nonprofit mission with its growth ambitions, allowing it to attract new investments while maintaining its commitment to ethical AI development.
