OpenAI completes for-profit restructuring: Who controls what
What's the story
OpenAI has completed its restructuring, with its non-profit arm retaining a controlling stake in the for-profit business. The for-profit unit, named OpenAI Group PBC, now operates as a public benefit corporation. The non-profit, now called the OpenAI Foundation, holds 26% of the for-profit entity. Around 47% is owned by current and former employees and investors, while Microsoft owns 27%.
Information
A look at Microsoft's investments
Microsoft's stake in OpenAI Group PBC is valued at around $135 billion. The Satya Nadella-led firm had first backed OpenAI in 2019 and since then it has invested over $13 billion in the ChatGPT maker.
Board
Who governs the OpenAI Foundation?
OpenAI Foundation is governed by board of directors, comprising Bret Taylor (chairperson), Adam D'Angelo, Dr. Sue Desmond-Hellmann, Dr. Zico Kolter, and General Paul M. Nakasone. Adebayo Ogunlesi, Nicole Seligman, Larry Summers, and CEO Sam Altman are also members. To note, OpenAI Foundation appoints members of the board of OpenAI Group and can replace directors at any time. Also, all current OpenAI Foundation directors will serve on OpenAI Group's board, barring Dr. Kolter, who will serve as a non-voting observer.
Health spending
OpenAI pledges $25B for health breakthroughs
The OpenAI Foundation has pledged an initial $25 billion to accelerate health breakthroughs and technical solutions for AI resilience. Microsoft also announced that OpenAI has agreed to buy an additional $250 billion worth of Azure services, although it will no longer have the first right of refusal as OpenAI's compute provider. This marks a significant shift in their partnership dynamics going forward.
Business evolution
IPO likely path for OpenAI's future
OpenAI plans to transition from a product company into a platform that enables others to build their own tools, services, and businesses on its technology. Altman said an initial public offering (IPO) is the most likely path for the company's future due to the capital required for training and building AI systems like ChatGPT. This restructuring removes major constraints on OpenAI's ability to raise capital and secure computing resources from Microsoft.