OpenAI announced on Tuesday that it has finalized the transition of its main business into a for-profit corporation. This move follows the approval from Delaware Attorney General Kathy Jennings, allowing the company to shift from its original non-profit status, which was established in 2015, to a public benefit corporation aimed at serving the public interest.
As part of this restructuring, OpenAI has granted Microsoft, an early investor in the organization, a 27% ownership stake. The non-profit parent organization, which has governed OpenAI since its inception, retains a substantial share valued at approximately $130 billion, a figure that may increase over time.
This agreement marks the conclusion of nearly a year of discussions involving the attorneys general of California and Delaware, along with various investors and philanthropic entities. The key issue at hand was whether OpenAI could maintain its core mission while transitioning into a more traditional corporate model. The new framework is anticipated to facilitate OpenAI in securing additional funding, attracting top talent, and potentially setting the stage for an initial public offering.
Kathy Jennings expressed no objections to the restructuring plan, effectively wrapping up a lengthy negotiation process regarding OpenAI“s governance and the dynamics between its non-profit board and for-profit investors. This review included evaluations by authorities in both Delaware and California concerning the proposed corporate changes.
Bret Taylor, chair of OpenAI“s board, remarked in a blog post that the organization has completed its recapitalization, streamlining its corporate structure. This transition aims to bolster its operational capabilities while aligning with its broader objectives.
