OpenAI can now restructure itself as a public benefit corporation
What's the story
Microsoft has struck a deal with OpenAI, allowing the latter to restructure itself as a public benefit corporation. The move would give Microsoft an approximately $135 billion (27%) stake in the AI start-up. Following the announcement, Microsoft's shares surged by 4%, indicating investor confidence in the potential of this new arrangement. The restructuring could also pave the way for OpenAI's future IPO plans.
Deal
Strategic partnership enhances collaboration
In addition to the restructuring deal, Microsoft and OpenAI have also entered into a strategic partnership. The AI start-up will buy $250 billion worth of Azure cloud computing services from Microsoft. In return, the tech giant has agreed to waive its right of first refusal for providing computing services to OpenAI. This move further strengthens their collaboration in the rapidly evolving AI space.
IP rights
Previous agreement with OpenAI
Previously, Microsoft had an agreement with OpenAI that gave it intellectual property rights to the latter's products and models until 2030, or until it achieved artificial general intelligence (AGI). This deal was part of their ongoing collaboration in developing cutting-edge AI technologies. The new restructuring and partnership agreements mark a significant evolution in this relationship, potentially opening new avenues for both companies.