OpenAI announced Tuesday that it has completed a recapitalization and separated AI Labs into a for-profit corporation housed within a nonprofit foundation. This is the end result of a complex legal process that was fiercely resisted by estranged co-founder Elon Musk.
Under the new structure, the nonprofit OpenAI Foundation will legally control a public benefit corporation called OpenAI Group, which will be free to raise funds and make acquisitions without being legally bound. The foundation will hold a significant stake in OpenAI Group and appoint its board of directors.
“We believe that the world’s most powerful technologies must be developed in a way that reflects the interests of the entire world,” OpenAI Chairman Brett Taylor said in a blog post. “Completing the recapitalization provides us with the ability to continue to push the frontiers of AI and a modern corporate structure that ensures progress for everyone.”
Under the new structure, the OpenAI Foundation will own 26% of the commercial stock, with warrants for additional shares if the company continues to grow. Microsoft, an early investor in OpenAI, will own about 27% of the company, worth about $135 billion, and investors and employees will own the remaining 47%.
The deal will also extend Microsoft’s intellectual property rights to OpenAI models through 2032, according to another Microsoft blog post. If OpenAI declares that it has achieved its long-held goal of artificial general intelligence, the deal will also require it to submit it to an independent panel of experts for verification.
Prior to this recapitalization, OpenAI operated as a nonprofit organization with strict capital restrictions, a position that became increasingly untenable as the company’s fundraising efforts became more ambitious. In April, SoftBank announced an unprecedented $30 billion investment in OpenAI, contingent on the company’s success in turning it into a commercial enterprise. On Saturday, The Information reported that the final round of funds had been transferred, suggesting that the restructuring could move forward.
There have been numerous legal efforts to block or influence this restructuring, most notably Elon Musk’s one-time offer to buy the company for $97.4 billion.
tech crunch event
san francisco
|
October 27-29, 2025
The attorneys general of California and Delaware, who had expressed concerns about the conversion, will allow the proceeding to proceed, subject to further conditions announced by their respective Justice Departments. Notably, California’s agreement requires OpenAI to “continue to take steps to reduce risks to teens and others.”
Relationship to the development and deployment of AI and AGI. ”
In his announcement post, Taylor cited discussions with state officials as having a positive impact on the process. “As a result of these discussions, we have made several changes that we believe are better for OpenAI and, as a result, the public we serve,” Taylor wrote.
In response to the news, CEO Sam Altman announced a public livestream where he and lead scientist Jakub Paciocki answered questions from the public. The event begins at 10:30 a.m. Pacific Time.
Source link
