- OpenAI has restructured itself and created a for-profit arm with the new non-profit OpenAI Foundation controlling the operations.
- OpenAI has also extended its partnership with Microsoft until 2032. OpenAI can now choose its own compute provider.
- Once OpenAI declares AGI, it must be verified by an independent expert panel.
After a long-drawn-out process, OpenAI has finally completed its for-profit transition to enable simpler recapitalization. It has created the OpenAI Foundation (valued $130B) which will be the non-profit entity, and it will control the OpenAI for-profit (OpenAI Group PBC) arm. Along with that, OpenAI and Microsoft have renewed their partnership, and the deal is extended until 2032.
OpenAI’s AGI Claim Will Be Verified By an Independent Panel
Microsoft’s investment in OpenAI is now valued at $135 billion (roughly 27% stake). Prior to the recent funding, Microsoft’s stake was around 32.5%. The most important detail to come out of this deal is that once OpenAI declares that it has achieved AGI (Artificial General Intelligence), an independent expert panel must verify the claim.
Apart from that, Microsoft will retain IP rights for both OpenAI’s models and products until 2032. Even after achieving AGI, the technology will be shared with appropriate safety guardrails.
Notably, OpenAI in its blog post writes “Microsoft’s IP rights to research, defined as the confidential methods used in the development of models and systems, will remain until either the expert panel verifies AGI or through 2030, whichever is first.“
OpenAI believes it may achieve AGI by 2030. And Microsoft is now free to pursue AGI independently or in partnership with third parties, which was blocked earlier. Finally, OpenAI is now free to choose its compute provider and Microsoft doesn’t have a have a right of first refusal.
After dropping its earlier plan to make OpenAI a pure for-profit company, the hot AI startup has now restructured the company to make fundraising easier. Recently, there were reports that suggested that Microsoft may abandon talks with OpenAI. In fact, at one point, OpenAI even considered filing antitrust accusation against Microsoft as tensions flared up. Now, both companies have finally reached a stable consensus.
Meanwhile, the Wall Street Journal reports that OpenAI may go public as early as 2027. It will be interesting to see how OpenAI maintains its technological lead in the AI race.
