Microsoft and OpenAI sign non-binding agreement on public benefit corporation transition

OpenAI and Microsoft have reached a non-binding memorandum of understanding that outlines the next phase of their partnership, which includes OpenAI's plan to restructure its for-profit arm into a public benefit corporation (PBC). This restructuring would allow OpenAI to raise new capital and potentially go public, while its nonprofit parent retains control and holds an equity stake valued at over $100 billion. Microsoft, which has invested more than $13 billion since 2019, currently has preferred access to OpenAI's AI technology through 2030 and is negotiating for continued access beyond that. The agreement marks the culmination of months of negotiations and aims to balance OpenAI's innovative goals with its commitment to ethical AI development and safety. Regulatory approval from states like California and Delaware is still pending before the transition can proceed. Both companies emphasized their ongoing collaboration to deliver advanced AI tools while maintaining a shared focus on safety and ethical considerations.