OpenAI and Microsoft have jointly announced that they’ve reached a deal to complete OpenAI’s restructure into a more traditional for-profit corporation.
Microsoft will also retain rights to OpenAI’s research IP, defined as “confidential methods used in the development of models and systems,” until either AGI is verified or 2030, whichever comes first. However, Microsoft’s IP rights no longer include OpenAI’s consumer hardware. The company also relinquished its cloud exclusivity with OpenAI, a concession on its part, but announced OpenAI has contracted to purchase an incremental $250 billion of Azure services.
The Attorney General of California, Rob Bonta, told Fortune in a statement that it would “not be in court opposing OpenAI’s recapitalization plan.”
“Over the last year and a half, my office has conducted a robust investigation into OpenAI’s initial plan to restructure, followed by its revised plan to recapitalize. We secured concessions that ensure charitable assets are used for their intended purpose, safety will be prioritized, as well as a commitment that OpenAI will remain right here in California,” he said.
The restructuring plan has taken nearly a year to negotiate and has reportedly been a source of tension between the two companies. The new agreement lifts a key restriction on OpenAI’s ability to raise capital, a limitation dating back to its 2019 partnership with Microsoft, which granted the tech giant extensive rights over OpenAI’s work in exchange for the costly cloud computing power needed to support it.
“The OpenAI mission — ensuring that AGI benefits all of humanity — will be advanced through both the business and the Foundation,” Taylor said in a blog post announcing the deal. “The more OpenAI succeeds as a company, the more the non-profit’s equity stake will be worth, which the non-profit will use to fund its philanthropic work.”
