"OpenAI on Tuesday said it had completed its recapitalization, splitting the AI lab into a for-profit corporation nested inside a non-profit foundation. It's the end result of a complex legal process that had been strenuously resisted by its estranged co-founder, Elon Musk. Under the new structure, the non-profit OpenAI Foundation will have legal control over a public benefit corporation called OpenAI Group, which is free to raise funding or acquire companies without legal restraint."
"Under the new structure, the OpenAI Foundation will own 26% of the for-profit, with a warrant for additional shares to be granted if the company continues to grow. According to a separate blog post by Microsoft, the deal will also extend Microsoft's IP rights to OpenAI models through 2032. If OpenAI ever declares that it has achieved its long-held goal of artificial general intelligence, the deal will also require it to submit to an independent expert panel for verification."
OpenAI completed a recapitalization that splits the lab into a for-profit corporation, OpenAI Group, legally controlled by the non-profit OpenAI Foundation. The Foundation will own 26% of OpenAI Group and appoint its board, and holds a warrant for additional shares if the company continues to grow. Microsoft will hold roughly 27% of the for-profit, valued around $135 billion, with investors and employees holding the remaining 47%. The deal extends Microsoft's IP rights to OpenAI models through 2032 and requires independent expert verification if OpenAI declares achievement of artificial general intelligence. The structure allows the for-profit to raise funding and acquire companies without legal restraint.
Read at TechCrunch
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