Artificial intelligence giant OpenAI on Thursday announced its nonprofit parent will retain control of the company while also gaining an equity stake worth more than $100 billion.
The move will allow OpenAI to raise new capital while also making its nonprofit parent company “one of the most well-resourced philanthropic organizations in the world,” according to Bret Taylor, chairman of OpenAI’s board.
“This recapitalization would also enable us to raise the capital required to accomplish our mission — and ensure that as OpenAI’s [public benefit corporation] grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact,” Taylor said in a statement.
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OpenAI and Microsoft also said in a joint statement Thursday they signed a non-binding memorandum of understanding shaping their next phase of partnership and are actively working to finalize a definitive deal. The companies said they are focused on building “the best” artificial intelligence tools that are also safe.
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“OpenAI and Microsoft have signed a non-binding memorandum of understanding (MOU) for the next phase of our partnership,” the two companies said in a joint statement Thursday afternoon. “We are actively working to finalize contractual terms in a definitive agreement. Together, we remain focused on delivering the best AI tools for everyone, grounded in our shared commitment to safety.”
Microsoft has reportedly invested around $13 billion in the ChatGPT creator since 2019.
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In May, OpenAI announced it was scuttling its plan to move the company away from a nonprofit structure to becoming a for-profit company. The ChatGPT-maker created a for-profit limited liability company, which it converted into a public benefit corporation that considers the interests of shareholders as well as OpenAI’s mission. The tech giant announced at the time that OpenAI’s nonprofit would have operational control over the public benefit corporation and would be a large shareholder in it.
OpenAI CEO Sam Altman prompted the company’s exploration of moving to a for-profit structure to make it easier for the company to raise the large amounts of money for investments he thinks will be needed to achieve artificial general intelligence (AGI). He sent a letter to employees at the time explaining the decision and what it means for the company.
“OpenAI was founded as a nonprofit, is today a nonprofit that oversees and controls the for-profit, and going forward will remain a nonprofit that oversees and controls the for-profit. That will not change,” Altman wrote in May.
FOX Business’ Eric Revell contributed to this report.
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