OpenAI, Microsoft renegotiate for new funding and IPO

Through this move, OpenAI intends to roll out a future IPO and protect its access to advanced AI models, as detailed by the Financial Times.

However, a complexity in the negotiations is how much equity in OpenAI’s new for-profit business Microsoft is set to benefit from in exchange for the over USD 13 billion it has invested in the company. The same sources mention that Microsoft is offering to trade some of its equity in exchange for access to additional technology developed after the 2030 limit, when the current contract is set to close. This contract includes what Microsoft can access regarding OpenAI’s intellectual property, such as models and products, and revenue share from sales.

Moreover, the two companies are looking into the terms of a wider contract, initially drafted when Microsoft invested USD 1 billion into OpenAI in 2019. OpenAI notified its investors about its plans to share a smaller fraction of revenue with Microsoft as it continues its restructuring. Microsoft, which is the company’s largest backer, is the go-between for OpenAI’s intentions to undergo the corporate restructuring that further distances the group from its roots as a non-profit focusing on developing AI to benefit humanity.

The deal with Microsoft can support OpenAI’s restructuring plans while also influencing the future of the company. At the time of writing, neither Microsoft nor OpenAI commented on the matter, declining requests regarding the report.

Recent investments in OpenAI