OpenAI Strikes Deal With Microsoft in For-Profit Switch

Core Insights - OpenAI has restructured its for-profit arm into a public benefit corporation, resulting in Microsoft holding a 27% stake valued at approximately $135 billion [2] - A new definitive agreement has been signed between OpenAI and Microsoft, granting Microsoft exclusive intellectual-property rights to OpenAI technology until 2032 [3] - OpenAI is set to purchase an additional $250 billion worth of Microsoft's Azure cloud-computing services, although Microsoft will no longer have a right of first refusal as OpenAI's compute provider [3] - The new arrangement allows Microsoft to independently pursue artificial general intelligence (AGI) [4] - OpenAI's restructuring may pave the way for a potential public offering and attract more talent [5] - The partnership between Microsoft and OpenAI has been ongoing since 2019, with Microsoft investing a total of $14 billion [5] - OpenAI is currently involved in a legal dispute with Elon Musk's xAI regarding its corporate status and mission [6] - Microsoft’s valuation has surpassed $4 trillion, joining Apple in this valuation milestone [7]