OpenAI plans to pursue a new business structure and partnership with Microsoft, according to regulatory updates.

OpenAI has announced a significant reorganization of its ownership structure, transitioning into a public benefit corporation, a decision endorsed by the attorneys general of Delaware and California. This restructuring aims to facilitate the commercialization of its artificial intelligence technology while retaining a foundational nonprofit control over its governance.

The move follows a thorough year of dialogue between OpenAI and regulatory bodies in both states, ultimately positioning the company for greater profit potential without relinquishing its primary commitment to its nonprofit mission. OpenAI’s CEO, Sam Altman, indicated in a recent call that the new structure could lead to the company going public on the stock market, primarily due to the pressing capital needs associated with the scale of its operations. However, a public offering was not part of the formal announcements.

Delaware Attorney General Kathy Jennings and California Attorney General Rob Bonta separately expressed their support for OpenAI’s new direction, concluding a lengthy period of scrutiny concerning the influence of profit-driven investors over the company’s governance. This restructuring allows OpenAI to engage more freely with its backers, most notably Microsoft, which has secured a stake of approximately 27% in the restructured corporation. In return, Microsoft retains a 5 billion investment, just ahead of the nonprofit’s 0 billion stake in the newly formed entity.

The discussions between OpenAI and its state regulators emphasized the importance of ensuring that the nonprofit retains control over the new public benefit corporation. The nonprofit will oversee the appointment and removal of board members and maintain a Safety and Security Committee responsible for reviewing the development of OpenAI’s technologies and controlling the release of products.

OpenAI was originally founded in 2015 with the mission of fostering safe developments in artificial general intelligence (AGI) that could benefit humanity. Throughout its history, it has shifted towards a for-profit model to support its expansive technological ambitions, including a collaboration with companies like Oracle and SoftBank to establish new data centers.

Furthermore, OpenAI has committed to investing billion toward health initiatives and cybersecurity as part of its nonprofit agenda. However, some experts warn that the arrangement may blur the lines between its nonprofit and for-profit activities, raising questions about the true independence of its governance.

As OpenAI progresses with its new structure and partnerships, it must navigate ongoing legal challenges, including a lawsuit from Elon Musk, one of its co-founders. Musk has expressed concerns that OpenAI has deviated from its original goals, prompting further scrutiny of the organization’s evolution under its new public benefit framework.

The future trajectory of OpenAI’s developments and its adherence to its essential commitments remain critical points of interest for stakeholders, regulators, and the broader technology community.