OpenAI announces its nonprofit will control a new public benefit corporation with a $100bn+ stake

OpenAI published a statement saying the nonprofit that had governed it since its founding would keep control of the company as it converted its for-profit arm into a public benefit corporation, and would hold an equity stake it valued at more than $100 billion. Board chair Bret Taylor said “OpenAI started as a nonprofit, remains one today, and will continue to be one — with the nonprofit holding the authority that guides our future.”

The statement came alongside a memorandum of understanding with Microsoft on revised commercial terms, which the two companies said they were still working to finalise into a definitive agreement. It did not fix the final numbers: OpenAI described the nonprofit’s stake only as exceeding $100 billion, well short of the precision it would later give.

The announcement addressed a question that had shadowed OpenAI since it adopted a “capped-profit” structure in 2019 and that had come to a head in the November 2023 board crisis — how a mission-governed nonprofit could raise the capital frontier AI development required without ceding control to investors. By stating the control arrangement and a stake value in advance of the legal conversion, OpenAI sought to reassure critics, including California’s and Delaware’s attorneys general, whose sign-off the restructuring needed, that the nonprofit’s authority would survive the change.

The terms settled here were provisional. When OpenAI completed the restructuring the following month, the nonprofit — renamed the OpenAI Foundation — was given a stake put at roughly $130 billion and about 26% of the new entity, alongside a finalised Microsoft agreement worth roughly $135 billion at around 27%.