OpenAI’s controversial for-profit restructuring is finally complete, along with a new deal with Microsoft.
The company’s for-profit arm is now a public benefit corporation, dubbed OpenAI Group PBC. The nonprofit is now called the OpenAI Foundation and “holds equity in the for-profit currently valued at approximately $130 billion” — it will begin with a $25 billion focus on healthcare and disease and “AI resilience,” per OpenAI’s blog post. The nonprofit will also get “additional ownership” after OpenAI’s for-profit reaches an unspecified valuation milestone.
The news comes after more than a year of OpenAI’s negotiations with the offices of the Attorneys General of California and Delaware — if they hadn’t eventually blessed the restructuring, OpenAI wouldn’t have been able to move forward. It also follows a thorny and drawn-out legal battle with Elon Musk, who has been suing both the company and CEO Sam Altman in attempts to stop the conversion. Musk co-founded OpenAI in 2015 as a nonprofit research lab.
Last month, the company switched its original plan — a for-profit conversion where the nonprofit would no longer be in control of any aspect of the rest of the company — to an adjusted one, under which OpenAI’s nonprofit parent will own an equity stake of up to $100 billion and continue to have oversight over the company.
If OpenAI didn’t announce the completed restructuring by New Year’s Eve, it could have lost up to $10 billion of its previously announced SoftBank investment.
The company will host a livestream Q&A at 1:30pm ET with Altman and OpenAI chief scientistJakub Pachocki.
