OpenAI announced on Tuesday that it has completed its recapitalization. This process restructured the AI lab into a for-profit corporation operating inside its original non-profit foundation. This change concludes a complex legal journey that was strongly opposed by its estranged co-founder, Elon Musk.
Under the new arrangement, the non-profit OpenAI Foundation maintains legal control over a public benefit corporation named OpenAI Group. This entity is now free to raise funds and acquire companies without legal restrictions. The Foundation will hold a significant stake in OpenAI Group and will appoint its board of directors.
OpenAI chairman Brett Taylor stated that the world’s most powerful technology must be developed to reflect the world’s collective interests. He noted that the recapitalization provides the ability to continue pushing the frontiers of AI, with an updated structure designed to ensure progress serves everyone.
In this new structure, the OpenAI Foundation will own 26 percent of the for-profit entity, with a warrant for additional shares if the company continues to grow. Microsoft, an early investor, will hold a stake of approximately 27 percent, valued at about 135 billion dollars. The remaining 47 percent is held by other investors and employees.
According to a separate announcement from Microsoft, the deal extends Microsoft’s intellectual property rights to OpenAI models through the year 2032. Furthermore, if OpenAI ever declares it has achieved artificial general intelligence, the deal requires the company to submit to an independent expert panel for verification.
Before this recapitalization, OpenAI operated as a non-profit under strict equity restrictions. This position became difficult to maintain as the company pursued more ambitious fundraising. In April, SoftBank announced an unprecedented 30 billion dollar investment in OpenAI, which was contingent on the company’s successful conversion into a for-profit. A recent report indicated the final installment of this funding has been sent, signaling a breakthrough in the restructuring.
Several legal efforts were made to block or influence the restructuring, most notably from Elon Musk, who had at one point offered to acquire the company for 97.4 billion dollars. State attorneys general from California and Delaware also made inquiries into the process. Taylor cited these discussions as a positive influence, leading to several changes that he believes have made OpenAI better for the public it serves.
Following the announcement, CEO Sam Altman announced an open livestream with chief scientist Jakub Pachocki to answer questions from the public. The event is scheduled to begin at 10:30 a.m. Pacific Time.