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OpenAI, the creator of ChatGPT, has reached a new agreement with Microsoft to restructure its business model, paving a clearer path toward a public listing. The deal reflects escalating pressure and ambition within the artificial intelligence sector.
OpenAI will convert its structure into a public-benefit corporation (PBC), with its original nonprofit entity renamed the OpenAI Foundation retaining oversight. Microsoft will maintain a 27% stake in the newly formed for-profit arm. The reorganization has regulatory approval in California and Delaware, following scrutiny from state attorneys general concerned about the company’s charitable status and governance.
Reports suggest the restructuring values OpenAI at approximately US $500 billion, and opens the door to potential IPO activity in the coming years. Meanwhile, CEO Sam Altman recently reiterated that an IPO is not yet a priority. He says he is not “well-suited” to lead a public company and does not see an initial public offering as imminent.
Microsoft’s initial investment in OpenAI in 2019 has matured into a foundational partnership, with the firm committing to purchase up to US $250 billion in Azure infrastructure services from OpenAI. Under the new agreement, Microsoft loses its exclusive right to supply all compute to OpenAI, allowing the AI firm to diversify cloud partnerships, including deals with other providers such as Oracle.
The restructuring underscores the shift in AI from pure research to large-scale commercial deployment. By formalising its corporate governance and investor readiness, OpenAI signals a shift from niche AI startup to global technology company. Analysts note the move may accelerate capital inflows, strategic partnerships and filings for public markets.
Here is a six month old video that showcases how Microsoft was envisioning the IPO on OpenAI:
