OpenAI in Negotiations With Microsoft to Gain New Funding, Enable IPO

Two giants in the tech world, Microsoft and OpenAI, are negotiating to alter their partnership to protect Microsoft’s access to innovative AI tools and give OpenAI the ability to launch an IPO.

The contract, first agreed back in 2019 when Microsoft invested £752.6 million ($1 billion) into OpenAI, expires in 2030 and includes rules on what Microsoft can access at OpenAI, such as AI models and solutions.

As the ChatGPT maker is working to engage in a fundamental restructuring, that will see the organisation at some point launch an IPO, a new agreement needs to be agreed with Microsoft that will calculate how much equity the tech giant has in the reshaped OpenAI.

“We continue to work closely with Microsoft, and look forward to finalising the details of this recapitalisation in the near future,” said OpenAI in a statement.

With more than £9.7 billion ($13 billion) having been invested by Microsoft in OpenAI, it is expected that Microsoft is looking to receive a fair amount of equity that recognises its previous funding. While full details have not been released about the negotiations, it has been reported that OpenAI wants to reduce the revenue share Microsoft receives from OpenAI from 20% to 10%.

In a letter sent to employees of OpenAI discussing the planned changes to the structure of the organisation, CEO Sam Altman said a transition to a Public Benefit Corporation (PBC) is underway.

“We now see a way for AGI to directly empower everyone as the most capable tool in human history. If we can do this, we believe people will build incredible things for each other and continue to drive society and quality of life forward. It will, of course, not be all used for good, but we trust humanity and think the good will outweigh the bad by orders of magnitude.”

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