OpenAI reaches new agreement with Microsoft to change its corporate structure

By THALIA BEATY and MATT O BRIEN OpenAI has reached a new tentative agreement with Microsoft and disclosed its nonprofit which technically controls its business will now be given a billion equity stake in its for-profit corporation Related Articles Thinking about getting an EV Here s why you need to move by Sept With Hyundai raid Trump s immigration crackdown runs into his push for foreign assets Wall Street coasts toward the finish of its best week in the last What I ve done right with my portfolio A United Airlines commuter plane makes crisis landing in Osaka as cargo fire is suspected The maker of ChatGPT declared it had reached a new nonbinding agreement with Microsoft its longtime partner for the next phase of our partnership The announcements on Thursday include a minimal details about these new arrangements OpenAI s proposed changes to its corporate structure have drawn the scrutiny of regulators competitors and advocates concerned about the impacts of artificial intelligence OpenAI was founded as a nonprofit in and its nonprofit board has continued to control the for-profit subsidiary that now develops and sells its AI products It s not clear whether the billion equity stake the nonprofit will get as part of this announcement represents a controlling stake in the business California Attorney General Rob Bonta disclosed last week that his office was studying OpenAI s proposed restructuring of its finances and governance His office mentioned they could not comment on the new announcements but declared they are committed to protecting charitable assets for their intended purpose Bonta and Delaware Attorney General Kathy Jennings also sent the company a letter expressing concerns about the safety of ChatGPT after meeting with OpenAI s legal crew earlier last week in Delaware where OpenAI is incorporated Together we are particularly concerned with ensuring that the stated safety mission of OpenAI as a non-profit remains front and center Bonta reported in a report last week Microsoft invested its first billion in OpenAI in and the two companies later formed an agreement that made Microsoft the unique provider of the computing power needed to build OpenAI s device In turn Microsoft heavily used the apparatus behind ChatGPT to enhance its own AI products The two companies communicated on Jan that they were altering that agreement enabling the smaller company to build its own computing ceiling primarily for research and training of models That coincided with OpenAI s announcements of a partnership with Oracle to build a massive new content center in Abilene Texas But other parts of its agreements with Microsoft remained up in the air as the two companies appeared to veer further apart Their Thursday joint announcement explained they were still actively working to finalize contractual terms in a definitive agreement Both companies declined further comment OpenAI had given its nonprofit board of directors whose members now include a former U S Treasury secretary the responsibility of deciding when its AI systems have reached the point at which they outperform humans at preponderance economically valuable work a concept known as artificial general intelligence or AGI Such an achievement per its earlier agreements would cut off Microsoft from the rights to commercialize such a system since the terms only apply to pre-AGI apparatus OpenAI s corporate structure and nonprofit mission are also the subject of a lawsuit brought by Elon Musk who helped located the nonprofit research lab and provided initial funding Musk s suit seeks to stop OpenAI from taking control of the company away from its nonprofit and alleges it has betrayed its promise to develop AI for the benefit of humanity The Associated Press and OpenAI have a licensing and hardware agreement that allows OpenAI access to part of AP s text archives Associated Press coverage of philanthropy and non-profits receives endorsement through the AP s collaboration with The Conversation US with funding from Lilly Endowment Inc The AP is solely responsible for this content For all of AP s philanthropy coverage visit https apnews com hub philanthropy