OpenAI announced that it has signed a non-binding Memorandum of Understanding (MOU) with its major investor Microsoft, marking a new phase in their collaboration. The core of the agreement is OpenAI's plan to transform its for-profit division into a Public Benefit Corporation (PBC). If approved by U.S. state regulatory authorities, this transformation could bring more financing opportunities for OpenAI and potentially pave the way for future listing.
Image source note: The image was generated by AI. The image licensing service provider is Midjourney.
OpenAI Chairman Brett Taylor stated that the company's nonprofit organization will continue to exist and retain control over operations. Under this non-binding agreement, OpenAI's nonprofit organization will receive shares in the newly established PBC, which is expected to be valued at over $100 billion, approximately 71.2159 billion Chinese yuan. Specific transaction terms have not been disclosed, and both parties are actively working towards finalizing the agreement.
According to the existing agreement, Microsoft is OpenAI's primary cloud service provider and has the right to priority use of its technology. However, as the ChatGPT business has developed rapidly, OpenAI has sought to reduce Microsoft's control. Taylor said that OpenAI and Microsoft are communicating with the offices of the attorneys general in California and Delaware to explain that the transformation plan requires regulatory approval.
According to a report by The Wall Street Journal, negotiations between the two sides had once hit a deadlock in recent months. Microsoft wanted to take control of the technologies related to Windsurf, an AI coding company that OpenAI planned to acquire this year, while OpenAI insisted on maintaining the company's intellectual property independence. In the end, the acquisition did not go through, and the founder of Windsurf chose to join Google, while other teams were acquired by Cognition.
In addition, the for-profit transformation is also a point of contention in Elon Musk's lawsuit against OpenAI. Musk's side accused the OpenAI leadership of abandoning its nonprofit mission and attempted to disclose the details of the negotiations with Microsoft. Earlier this year, Musk had made a $97 billion acquisition offer, which was rejected by the OpenAI board. Notably, the value of the shares held by the nonprofit organization in the current agreement is higher than Musk's previous acquisition offer.
Key points:
🌟 OpenAI and Microsoft have reached a non-binding Memorandum of Understanding, planning to transform the for-profit division into a public benefit company.
💼 If approved, the transformation could bring new financing opportunities and the possibility of future listing for OpenAI.
🤝 Both sides are still actively working towards finalizing the agreement, facing challenges such as regulatory approvals and intellectual property issues.
