OpenAI and Microsoft entered into a non-binding memorandum of understanding (MoU) to negotiate new terms for their current partnership, aiming to support the AI firm’s restructuring plans.
In a brief announcement, the firms disclosed their efforts to “finalize the contractual terms in a definitive agreement,” while staying committed to “providing the best AI tools for all.”
The announcement signifies significant progress in the ongoing negotiations between the two parties to finalize a new agreement, as OpenAI aims to restructure and create a for-profit branch to enhance its capital access and finance its growth.
OpenAI’s initial proposals involved transforming its non-profit organization into a for-profit entity. The company modified the plan and announced in May that its nonprofit organization would oversee the entire company, encompassing a for-profit division.
Elon Musk, one of OpenAI’s cofounders, has condemned the restructuring proposals and warned of legal action.
In 2019, Microsoft put $1 billion into OpenAI and later invested approximately $10 billion in 2023. Reuters stated that under the earlier agreement, Microsoft held exclusive rights to market OpenAI’s software tools and enjoyed prioritized access to its technology.
The outlet noted that as OpenAI’s income expands into billions, it aims to form additional partnerships with cloud providers and adopt a traditional corporate framework, facilitating further growth
