OpenAI, Microsoft sign agreement on partnership and PBC transition
OpenAI Board Chairman Bret Taylor said that OpenAI’s original identity as a non-profit remains intact, which will continue to set the organisation’s direction and values, while also taking on a new role of overseeing the PBC and directly sharing in its success.
ChatGPT maker OpenAI on Thursday said it has entered a non-binding deal with Microsoft to reshape their partnership. Under this plan, OpenAI’s for-profit arm would be restructured into a public benefit corporation (PBC), a legal structure designed to balance commercial success with a mission-driven purpose.
“Microsoft and OpenAI have signed a non-binding memorandum of understanding (MOU) for the next phase of our partnership. We are actively working to finalise contractual terms in a definitive agreement. Together, we remain focused on delivering the best AI tools for everyone, grounded in our shared commitment to safety,” the companies said in a joint statement.
In a blog post, OpenAI Board Chairman Bret Taylor explained that the company's original identity as a non-profit remains intact, which will continue to set the organisation’s direction and values, while also taking on a new role of overseeing the PBC and directly sharing in its success.
Crucially, the non-profit will now hold an equity stake in the PBC, valued at more than $100 billion, making it one of the most well-resourced philanthropic entities globally.
“This recapitalisation would also enable us to raise the capital required to accomplish our mission—and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact,” Taylor said.
He also underscored that its core mission is to ensure AGI benefits all of humanity. The new PBC charter will enshrine this principle, requiring that safety decisions always be guided by it. To reinforce accountability, OpenAI is engaging with the Attorneys General of California and Delaware—US states where it is incorporated—to strengthen its governance.
Microsoft currently has priority access to OpenAI’s technology and provides its main cloud services. But as ChatGPT has grown, OpenAI is pushing for more independence.
To reduce reliance on Microsoft, it has lined up major alternative deals, including a $300 billion cloud contract with Oracle starting in 2027 and a partnership with SoftBank on the Stargate data centre project.
Edited by Suman Singh