Microsoft and OpenAI announced Thursday a non-binding deal outlining terms that would allow OpenAI to restructure into a for-profit company, marking a key step in the high-profile partnership fueling ChatGPT’s growth.
The new commercial arrangements, details of which were not disclosed, are intended to finalize a definitive agreement enabling OpenAI to raise capital under a more conventional governance structure and eventually go public to fund artificial intelligence development.
Microsoft previously invested $1 billion in OpenAI in 2019 and $10 billion at the start of 2023. Under prior agreements, Microsoft had exclusive rights to sell OpenAI software via Azure and preferred access to its technology. The company was once OpenAI’s sole compute provider but relaxed its role this year, allowing OpenAI to pursue its own data center project, Stargate, and sign multi-billion-dollar cloud deals with Oracle and Google.
As OpenAI’s revenue grows into the billions, it seeks partnerships with additional cloud providers to expand sales and secure computing capacity. Microsoft, meanwhile, wants continued access to OpenAI’s technology even if its models reach humanlike intelligence, a milestone that could end the current partnership under previous terms.
OpenAI’s nonprofit arm is expected to receive over $100 billion, about 20 percent of the $500 billion valuation the company seeks in private markets, making it one of the best-funded nonprofits globally, according to Bret Taylor, chairman of OpenAI’s nonprofit board. The companies did not disclose Microsoft’s ownership stake or whether it would retain exclusive access to OpenAI’s newest models.
Regulatory approval is still required from attorneys general in California and Delaware. OpenAI hopes to complete the conversion by year-end to secure billions in funding tied to the timeline.
The two companies compete across products ranging from consumer chatbots to AI tools for businesses, while Microsoft continues developing its own AI models to reduce reliance on OpenAI technology.
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Start your day informed with the AnewZ Morning Brief. Here are the top stories for the 29th of April, covering the latest developments you need to know.
Elon Musk took the stand on Tuesday (28 April) at a high-stakes trial over the future of OpenAI, casting his lawsuit against the ChatGPT maker as a defence of charitable giving.
A pivotal trial that could shape the governance of artificial intelligence begins Tuesday in California, as Elon Musk and Sam Altman face off over OpenAI’s shift to a for-profit model.
The inaugural Enhanced Games began in Las Vegas on Sunday (24 May), launching one of the most controversial experiments in modern sport, in which athletes openly compete using performance-enhancing drugs banned under traditional anti-doping rules.
A peace agreement between Washington and Tehran is yet to materialise, with U.S. President Donald Trump saying that negotiations are incomplete and an Iranian Foreign Ministry Spokesman saying that a deal isn't imminent.
A "largely negotiated" memorandum of understanding on an Iran peace deal would reopen the Strait of Hormuz, U.S. President Donald Trump said on Saturday, though the Iranian Fars news agency disputed that claim.
The World Health Organization warned on Monday that the fast-moving Ebola outbreak in the Democratic Republic of the Congo and Uganda was outpacing response efforts, with 220 suspected deaths reported so far.
Police fired tear gas and clashed with protesters in central Belgrade on Saturday, as tens of thousands gathered to demand early elections and an end to the more than decade-long rule of Serbia's President Aleksandar Vučić.
China will send an astronaut to its space station on Sunday for a one-year mission, the longest duration for the country so far. The mission will help study long-duration human physiology in space as China works toward a crewed Moon landing by 2030.
Anxiety over artificial intelligence is hardening among young workers as executives promote faster adoption and companies point to automation in fresh job cuts.
Hackers are increasingly using artificial intelligence to detect software vulnerabilities, reducing the time organisations have to respond to cyber threats, Verizon said in its annual data breach report.
China has launched the world’s first experiment to study how artificial human embryos develop in space, marking a major step in understanding whether humans could one day reproduce beyond Earth.
Japanese filmmaker Koji Fukada has said that the use of artificial intelligence (AI) to “jump straight to the result” risks undermining the purpose of art, which he believes should be rooted in self-expression and a deeper understanding of the world.
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