OpenAI Reaches $500 Billion Valuation After Sealing Deal With Microsoft
Microsoft, which has invested $13.8 billion in OpenAI since 2019, has now seen that investment multiply nearly tenfold.
Quick overview
- OpenAI has transitioned to a public benefit corporation controlled by the OpenAI Foundation, maintaining its nonprofit mission.
- Microsoft has acquired a 27% stake in OpenAI, valued at approximately $135 billion, and extended their cloud partnership until 2032.
- The agreement grants Microsoft rights to OpenAI's AI models for the next decade, even if OpenAI achieves artificial general intelligence.
- Following the announcement, Microsoft shares increased by 4%, indicating strong investor confidence in the partnership.
The new entity behind ChatGPT, OpenAI Group PBC, will be controlled by the OpenAI Foundation, which will retain its nonprofit status and mission of developing artificial intelligence responsibly.
Microsoft and OpenAI announced an ambitious agreement that transforms the creator of ChatGPT into a public benefit corporation valued at $500 billion, paving the way for a future IPO and positioning it among the world’s largest AI companies.
Under the deal, Microsoft will hold a 27% stake, equivalent to roughly $135 billion, and extend its cloud computing partnership with OpenAI through at least 2032.
Microsoft Secures Rights Over ChatGPT
The agreement gives Microsoft continued rights to OpenAI’s AI models and products for the next decade — even in the event that OpenAI achieves artificial general intelligence (AGI), the milestone where AI matches human cognitive abilities.
The restructuring resolves the complex legal and financial structure OpenAI had since its founding as a nonprofit in 2015. It also clarifies Microsoft’s intellectual property rights and opens the door to easier fundraising and future expansion.
Microsoft, which has invested $13.8 billion in OpenAI since 2019, has now seen that investment multiply nearly tenfold. As part of the deal, OpenAI will purchase $250 billion in Azure cloud services, while Microsoft waives its exclusive rights in that area.
Bret Taylor, president of the OpenAI Foundation, welcomed the new structure, saying it gives the organization “direct access to significant resources ahead of the arrival of AGI.”
Microsoft shares rose 4% following the announcement, reflecting investor confidence in the revamped partnership.
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