OpenAI has completed its long-awaited corporate restructuring, officially becoming a public benefit corporation (PBC) under the oversight of the newly formed OpenAI Foundation, the company announced Tuesday. The change formalizes the relationship between OpenAI’s nonprofit and for-profit divisions and sets the stage for a potential future public listing.
Under the new structure, the OpenAI Foundation will hold legal control of OpenAI Group, the for-profit arm of the company, and an equity stake valued at about $130 billion. The foundation will appoint the board of directors and will gain additional governance rights once OpenAI reaches a future valuation milestone.
Chairman Bret Taylor said the change gives OpenAI “the ability to keep pushing the frontier of AI” while ensuring that its progress benefits the public.
Microsoft Adjusts Its Stake
The restructuring was made possible through a new agreement with Microsoft, OpenAI’s biggest strategic partner. Microsoft now owns a 27 percent stake in the for-profit entity, valued at around $135 billion, down from its previous 32 percent share. This sets OpenAI’s total valuation at roughly $500 billion.
Microsoft’s intellectual property rights to OpenAI models and products will remain in effect until 2032, covering any future models developed after OpenAI declares it has achieved artificial general intelligence (AGI). To verify such a claim, both companies will appoint an independent expert panel.
Microsoft has waived its IP rights for OpenAI’s upcoming consumer hardware projects, which are being developed with former Apple designer Jony Ive. In exchange, OpenAI will spend $250 billion on Microsoft’s Azure cloud services, but Microsoft will no longer have the exclusive right to be OpenAI’s cloud provider.
Both companies described the process as a balanced outcome following months of difficult negotiations.
The restructuring comes after extensive review by California and Delaware state regulators, who approved the transition with certain conditions. OpenAI must continue to address youth safety risks and manage the ethical deployment of AI and AGI systems.
Under the new arrangement, the OpenAI Foundation will hold 26 percent of the for-profit entity, with additional shares to be granted if the company meets future growth milestones. The remaining equity belongs to investors and employees.
The conversion was also a condition of SoftBank’s $30 billion investment, finalized earlier this year.
Clearing the Path Forward
The restructuring removes key legal barriers that had limited OpenAI’s ability to raise capital and expand. The company now operates as a public benefit corporation, allowing it to pursue commercial opportunities while remaining accountable to its nonprofit mission.
“The close of our recapitalization gives us the flexibility to grow responsibly and continue developing AI that serves everyone,” Taylor wrote in the company’s announcement.
Following the announcement, CEO Sam Altman and Chief Scientist Jakub Pachocki hosted a public livestream to discuss the restructuring and answer user questions.
Featured image credits: Dado Ruvic/REUTERS
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