OpenAI completes restructure, solidifying Microsoft as a major shareholder

OpenAI on Tuesday announced it has completed its recapitalization, cementing its structure as a nonprofit with a controlling stake in its for-profit business.

The artificial intelligence startup said its nonprofit is now called the OpenAI Foundation, and it holds an equity stake worth about $130 billion in its for-profit arm. OpenAI said its for-profit arm is now a public benefit corporation called OpenAI Group PBC.

Under the new structure, the OpenAI Foundation will hold a 26% stake in the for-profit, with 47% held by current and former employees and investors.

Microsoft, which has invested over $13 billion in OpenAI and backed the company as early as 2019, said it supports OpenAI’s recapitalization and now holds an investment in the PBC that is valued at $135 billion, or roughly 27% of the company on an as-converted diluted basis.

The company said it held a 32.5% stake in the for-profit on an as-converted basis, excluding OpenAI’s recent funding rounds.

Microsoft shares rose 3.5% in premarket trading on Tuesday.

“The more OpenAI succeeds as a company, the more the non-profit’s equity stake will be worth, which the non-profit will use to fund its philanthropic work,” OpenAI said in a blog post.

The startup said the OpenAI Foundation will make an initial $25 billion commitment to work to accelerate health breakthroughs and technical solutions to AI resilience.

Microsoft said OpenAI will continue to serve as its frontier model partner, and it has exclusive IP rights and Azure API exclusivity until the startup reaches a technical milestone called Artificial General Intelligence, or AGI.

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