OpenAI Eyes For-Profit Transformation with Microsoft as a Key Player

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December 26, 2024 11:14 PM

In Brief:
OpenAI CEO Sam Altman plans to transition the organization from a non-profit to a for-profit entity.
Microsoft, which has pledged over $13 billion in investment, holds significant influence in the restructuring process.


According to a report by The Information, OpenAI is preparing to shift from its current non-profit structure to a for-profit company. Microsoft, as a major investor with over $13 billion in funding commitments, has emerged as a central figure in this transformation.

Discussions between OpenAI and Microsoft, ongoing since October, focus on several critical issues:

  • Microsoft’s equity in the for-profit entity.
  • Whether Microsoft will remain OpenAI’s exclusive cloud service provider.
  • The terms of Microsoft’s use of OpenAI’s intellectual property.
  • Microsoft’s right to extract 20% of OpenAI’s revenue.


The transformation is also under time pressure. If OpenAI fails to complete the process within two years, investors are entitled to recoup $7.2 billion plus interest, adding urgency to the restructuring.

Additionally, OpenAI plans to buy back employee stocks after the shift, further incentivizing employees to push for a swift resolution.

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