OpenAI strikes new deal with Microsoft
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Microsoft and OpenAI unveil a deal extending IP rights, adding independent AGI verification, and giving both sides more freedom while maintaining Azure ties.
In the new agreement, Microsoft gets a 27% stake in OpenAI's for-profit business, the OpenAI Group PBC, worth around $135 billion.
Microsoft and OpenAI announced the long-awaited details of their new partnership agreement Tuesday morning — with concessions on both sides that keep the companies aligned but not in lockstep as they move into their next phases of AI development.
The nonprofit arm, now called the OpenAI Foundation, will have a $130 billion stake in the for-profit enterprise.
Microsoft made its first investment in Sam Altman's OpenAI in 2019. It now holds a 27% in OpenAI's for-profit business.
The shift establishes a nonprofit foundation overseeing a for-profit corporation, allowing the world’s most valuable startup to woo investors and secure funds.
Microsoft's (MSFT) 27% stake in OpenAI (OPAI.PVT) is currently valued at $135 billion, according to the two companies' latest for-profit agreement. This all comes ahead of Microsoft's fiscal first quarter earnings results due out after the closing bell on Wednesday.
Uncertainty around Microsoft's future relationship with OpenAI had been a cloud over the stock until the companies announced on Tuesday new details around their arrangement. As per a new agreement, Microsoft's stake in OpenAI will have a valuation of about $135 billion.