OpenAI has finalised a restructuring plan with its external shareholder Microsoft that values the ChatGPT maker at $500 billion and clears the way for it to become a for-profit business.
Under the deal OpenAI, which was founded as a research-focused nonprofit business in 2015, will take on a more investor-friendly structure to allow it to raise capital. A non-profit called the OpenAI Foundation will hold equity in the company’s for-profit arm.
Microsoft, which first invested in OpenAI in 2019, will own a 27 per cent stake in the restructured artificial intelligence company worth about $135 billion, the companies said yesterday.
The deal will also give Microsoft access to OpenAI’s technology until 2032, even if OpenAI reaches artificial general intelligence, the point at which AI systems can match a well-educated human adult’s cognitive abilities.
Separately, OpenAI has agreed to buy $250 billion of Microsoft’s Azure cloud infrastructure services. However, Microsoft will lose its right of first refusal on new cloud services from OpenAI.
Shares of Microsoft gained $10.55, or 2 per cent, to $542.07 at the close in New York, propelling the group’s valuation to $4.1 trillion.
Raimo Lenschow, an analyst at Barclays, said: “The scale of the Azure commitment underscores Microsoft’s continued dominance in AI infrastructure, and the deal also sets the stage for long-term collaboration between the two firms.”
OpenAI has become a commercial giant since the launch of ChatGPT in 2022 which has 800 million weekly active users. It signed a deal in 2019 with Microsoft that gave the company rights over much of OpenAI’s work in exchange for providing the costly cloud computing services needed to carry it out. Open- AI is expected to make losses as it prioritises growth and developing more advanced AI models over profitability.
Analysts at HSBC have forecast OpenAI losses of $23.5 billion in 2025, rising to $60 billion in 2027.
The restructuring paves the way for OpenAI to pursue a potential public listing.
Bret Taylor, its chairman, said: “OpenAI has completed its recapitalisation, simplifying its corporate structure.
The nonprofit remains in control of the for-profit, and now has a direct path to major resources before AGI arrives.”
Gil Luria, head of technology research at DA Davidson, said the deal “resolves the longstanding issue of OpenAI being organised as a not-forprofit and settles the ownership rights of the technology vis-à-vis Microsoft.”
Silicon Valley and Wall Street have been consumed by an AI gold rush.
PayPal said yesterday it had entered into a deal with OpenAI that would allow ChatGPT users to buy products using the payment firm’s platform, sending its shares up $2.77, or 3.9 per cent, to $73.02 at the close of trading in New York.
PayPal also raised its profit forecast for the year again, banking on resilient consumer spending, and announced the first dividend in its 27-year history
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