OpenAI Completes Major Reorganization With $135 Billion Microsoft Stake

OpenAI has completed a restructuring, dividing itself into a nonprofit and for-profit entity, the company announced on Tuesday. The nonprofit arm, now called the OpenAI Foundation, will have a $130 billion stake in the for-profit enterprise, a public benefit corporation called OpenAI Group PBC.  “The OpenAI Foundation and OpenAI Group will work in concert to advance solutions to hard problems and opportunities posed by AI progress,” the company said in its blog post announcing the restructuring. “This includes making intelligence a tool that everyone can benefit from, building safe and aligned systems, turbocharging scientific discovery, and strengthening global cooperation and resilience.” OpenAI was founded in 2015 as a nonprofit, but in 2019, it established a “capped-profit” company under the control of the nonprofit. In 2024, OpenAI said it was planning to transform itself into a for-profit company. The announcement sparked controversy. OpenAI leaders were in discussions with the offices of the Attorneys General of California and Delaware for nearly a year before Tuesday’s announcement. Read More: A Timeline of the Battle for OpenAI: Musk, Altman, and the For-Profit Shift WIth the announcement of OpenAI’s restructuring came the news that Microsoft, which has invested in the organization since 2019, now holds an investment of $135 billion in the organization’s for-profit arm. Microsoft said it held a 32.5% stake on an as-converted basis in OpenAI Group PBC, excluding the impact of OpenAI’s recent funding rounds. “Since 2019, Microsoft and OpenAI have shared a vision to advance artificial intelligence responsibly and make its benefits broadly accessible,” OpenAI said in a blog post. “What began as an investment in a research organization has grown into one of the most successful partnerships in our industry. As we enter the next phase of this partnership, we’ve signed a new definitive agreement that builds on our foundation, strengthens our partnership, and sets the stage for long-term success for both organizations.” The OpenAI Foundation also said on Tuesday that it will focus $25 billion across two main areas: health breakthroughs and cures for diseases, as well as technical solutions to AI resilience.