ChatGPT Maker OpenAI and Microsoft Revise Partnership for PBC and IPO, Eyeing Tech Access Beyond 2030

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Updated May 12, 2025, 01:54 PM

OpenAI, the ChatGPT maker, is engaged in high-stakes negotiations with Microsoft to revise the terms of their multibillion-dollar partnership. The discussions aim to facilitate OpenAI's transition to a public benefit corporation (PBC) and pave the way for a future initial public offering (IPO), while ensuring Microsoft retains access to OpenAI's technology beyond the current contract's 2030 expiration date.

Microsoft, having invested over $13 billion in OpenAI, is considering relinquishing some of its equity in the restructured entity in exchange for access to new technologies developed after 2030. This move is crucial for OpenAI's plans to raise additional funding and to restructure into a more conventional for-profit model, which is seen as necessary to attract significant investment. The negotiations also involve revising the terms of a wider contract first drafted in 2019 when Microsoft initially invested $1 billion into OpenAI.

The negotiations come at a time when relations between the two companies have cooled, with OpenAI seeking greater independence and targeting enterprise customers directly. This has led to tensions, with some at Microsoft expressing frustration over OpenAI's approach to their partnership. OpenAI has been working with other partners like SoftBank and Oracle on a project called 'Stargate'. Despite these challenges, both companies are committed to reaching an agreement that supports their mutual interests in the AI sector. OpenAI's CEO Sam Altman aims to balance the company's original mission, overseen by a non-profit board, with the commercial demands of investors. Critics, including Elon Musk, have raised concerns about the restructuring, while regulatory bodies in Delaware and California, including Delaware's Attorney General Kathy Jennings, are reviewing the plan. Columbia Law School professor Dorothy Lund noted the delicate balance OpenAI must maintain between its mission and investor demands.

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