Microsoft and OpenAI are making adjustments to their long-standing partnership in a move that could pave the way for OpenAI’s upcoming initial public offering (IPO), according to The Financial Times. The revised agreement aims to balance Microsoft’s significant investment in ChatGPT developer with OpenAI’s plans to restructure its business model.
Microsoft, which initially invested $1 billion in OpenAI back in 2019 and later contributed over $13 billion, is negotiating new terms that involve relinquishing a portion of its equity stake in OpenAI’s for-profit unit. This move will be made to secure long-term access to AI models developed after 2030 when their current agreement expires, as per an FT report.
While the initial partnership was established when OpenAI was transitioning from a nonprofit to a capped-profit structure, recent pushback from former employees, researchers, and even rivals like Elon Musk has prompted a reconsideration of this shift to a more traditional business model. This strategic realignment will enable OpenAI’s next chapter as it ventures into the public market.