OpenAI has reached a new tentative agreement with Microsoft and said its nonprofit, which technically controls its business, will now be given a $100 billion equity stake in its for-profit corporation.
The maker of ChatGPT said it had reached a new nonbinding agreement with Microsoft, its longtime partner, “for the next phase of our partnership.”
The announcements on Thursday include a few details about these new arrangements. OpenAI’s proposed changes to its corporate structure have drawn the scrutiny of regulators, competitors and advocates concerned about the impacts of artificial intelligence.
OpenAI was founded as a nonprofit in 2015 and its nonprofit board has continued to control the for-profit subsidiary that now develops and sells its AI products. It’s not clear whether the $100 billion equity stake the nonprofit will get as part of this announcement represents a controlling stake in the business.
California Attorney General Rob Bonta said last week that his office was investigating OpenAI’s proposed restructuring of its finances and governance. His office said they could not comment on the new announcements but said they are “committed to protecting charitable assets for their intended purpose.”
Bonta and Delaware Attorney General Kathy Jennings also sent the company a letter expressing concerns about the safety of ChatGPT after meeting with OpenAI’s legal team earlier last week in Delaware, where OpenAI is incorporated.
“Together, we are particularly concerned with ensuring that the stated safety mission of OpenAI as a non-profit remains front and center,” Bonta said in a statement last week.
Microsoft invested its first $1 billion in OpenAI in 2019 and the two companies later formed an agreement that made Microsoft the exclusive provider of the computing power needed to build OpenAI’s technology. In turn, Microsoft heavily used the technology behind ChatGPT to enhance its own AI products.
The two companies announced on Jan. 21 that they were altering that agreement, enabling the smaller company to build its own computing capacity, “primarily for research and training of models.” That coincided with OpenAI’s announcements of a partnership with Oracle to build a massive new data center in Abilene, Texas.
But other parts of its agreements with Microsoft remained up in the air as the two companies appeared to veer further apart. Their Thursday joint statement said they were still “actively working to finalize contractual terms in a definitive agreement.” Both companies declined further comment.
