OpenAI is in talks with its main strategic investor, Microsoft, about changes to its partnership structure, steps that are intended to prepare the company for a possible IPO.
OpenAI is in talks with its main strategic investor, Microsoft, about changes to its partnership structure, steps that are intended to prepare the company for a possible IPO.
According to the Financial Times, Microsoft and OpenAI are discussing a revision of the agreements concluded back in 2019, when Microsoft first invested $1 billion in the startup. Since then, the total amount of investment from Microsoft has exceeded $13 billion, which gave it exclusive access to OpenAI models, including GPT-4, and the ability to integrate them into its products — primarily in Azure cloud services.
Initial Public Offering is the initial public offering of a company’s shares on a stock exchange. It allows a private company to raise capital from a wide range of investors and become public. OpenAI has remained a private entity until now, but its rapid growth and dominance in the AI market create the prerequisites for public investment.
The central issue in the negotiations is what Microsoft’s stake in the new OpenAI structure will be after the restructuring. In particular, an option is being discussed under which Microsoft would partially give up its stake in exchange for guarantees of long-term access to the company’s latest models after 2030. The current agreement governing the rights to the models and profits expires this year.
At the same time, the Financial Times reports a certain cooling in relations between the partners. In particular, last week it became known that OpenAI informed investors about plans to reduce the share of profits received by Microsoft as the largest investor. This may be part of a broader transformation — the company has abandoned its intentions to create a board of directors with private capital and instead plans to operate as a public benefit corporation. This will allow it to attract investors while maintaining a public orientation.
A few months ago, Microsoft also modified its collaboration with OpenAI after creating a joint venture with Oracle and SoftBank to develop AI data centers in the US worth up to $500 billion.
As we reported the other day, OpenAI is planning to halve its payments to its main investor, Microsoft. The company is looking to reduce the share of revenue it pays Microsoft from 20% to 10%.
