OpenAI and Microsoft Navigate $14 Billion Investment Transition
OpenAI and Microsoft are engaged in a high-stakes negotiation over a nearly $14 billion investment as OpenAI transitions from a nonprofit to a for-profit corporation
One major challenge is deciding how to divide ownership since Microsoft could own a big part.
OpenAI and Microsoft are trying to turn a nearly $14 billion investment into ownership in a new company that will make money. OpenAI, the company behind ChatGPT, is making a big change by switching from a nonprofit to a for-profit company.
One major challenge is deciding how to divide ownership since Microsoft could own a big part.
To help with these discussions, both companies have hired investment banks. Microsoft is working with Morgan Stanley, and OpenAI is working with Goldman Sachs.
They need to decide how much of the new company Microsoft will own and what rights it will have in running it.
Since 2019, Microsoft has put $13.75 billion into OpenAI. This amount includes $6.6 billion from a recent funding round.
OpenAI wants to become a public-benefit corporation. This means they want to make money while also helping people.
They have two years to finish this change. If they don’t, investors can ask for their money back.
