OpenAI Converts To Public-Benefit Corp, Paving Way For IPO And Boosting Microsoft To $4 Trillion Valuation

Benzinga

OpenAI has transitioned into a public-benefit corporation, paving the way for a future IPO and redefining its ties with Microsoft. The new structure gives Microsoft a 27% stake and $250 billion in Azure contracts, while OpenAI’s parent becomes a $130 billion foundation funding AI and healthcare initiatives. Microsoft’s valuation topped $4 trillion following the news.

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00:00It's Benzinga, bringing Wall Street to Main Street.

00:02OpenAI is officially converted to a public benefit corporation

00:05any months of legal investor wrangling over its non-profit roots

00:08and clearing a path toward an eventual IPO,

00:11and according to the Wall Street Journal,

00:12Microsoft will hold a 27% stake,

00:14while OpenAI's non-profit parent gains a $130 billion ownership interest

00:18that can increase as the company's value grows.

00:21Microsoft will obtain exclusive intellectual property rights

00:23to OpenAI technology until 2032.

00:27OpenAI will buy $250 billion in Azure cloud services,

00:30but Microsoft will no longer have first refusal rights as its computing provider.

00:34OpenAI's non-profit parent will be renamed the OpenAI Foundation

00:37and will commit $25 billion to healthcare and AI resilience initiatives,

00:42heading to a previously announced $50 billion non-profit fund.

00:45Microsoft's market value climbed above $4 trillion following the announcement,

00:48but shares up nearly 2% heading to Wednesday's earnings report.

00:52For all things money, visit Benzinga.com.

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