Chronicle of a Foretold Agreement? OpenAI and Microsoft, its main shareholder, have signed “a non-binding memorandum of understanding (MOU) for the next phase of our partnership”. This means that both companies are paving the legal path for the technology firm led by Sam Altman to modify its bylaws and convert its nonprofit branch into a Public Benefit Corporation (PBC).
Although this change may sound technical and bureaucratic, it could mark a turning point in the direction of one of the world’s most influential tech companies. While OpenAI still is (and according to their statements, will remain) a nonprofit organization, it is laying the groundwork to play an active role in its own profitability, through control and ownership in a future PBC valued at more than 100 billion dollars.
Let us break this down. Until now, OpenAI has operated under a rather peculiar structure: a nonprofit foundation that oversees a profit-driven subsidiary, with limits on its earning capacity. This model was designed to protect its original mission, which is to develop artificial general intelligence (AGI) to benefit all of humanity, without falling prey to purely commercial interests.
The new proposal seeks to convert this subsidiary into a PBC, a legal entity that balances shareholders’ interests with an explicit social purpose. In other words, they are indeed pursuing revenue (quite substantial revenue), but without losing sight of their foundational mission. This model has already been adopted by other AI giants such as Anthropic and xAI, and purpose-driven companies like Patagonia.
Under the proposed model, the nonprofit organization would remain in control, holding operational authority and an equity stake in the new PBC, which will enable it to raise significant capital to advance its social impact. In fact, through this strategy, OpenAI would become one of the world’s most well-capitalized philanthropic entities. It would be a kind of hybrid between a foundation and a startup, but on steroids.
As Bret Taylor explains, Chair of the OpenAI Board of Directors, “This new equity stake will exceed $100 billion, making it one of the world’s most highly capitalized philanthropic organizations. This recapitalization will also allow us to raise the necessary capital to fulfill our mission and ensure that, as the OpenAI PBC grows, so too will the organization’s resources, enabling us to achieve historic levels of community impact.”
OpenAI is not a typical company. It has never been. Since its inception, it has had an ambitious mission and an uncommon ethical focus. But it has also learned that scaling its technology requires more than good intentions: it requires money. A great deal of money.
In the words of Sam Altman himself: “We want to operate and acquire resources in a way that ensures our services are widely available to all of humanity, which currently requires hundreds of billions of dollars and may ultimately require trillions.” The executive wrote this in an open letter to his employees this past May, in which he explained his plans for OpenAI’s structural evolution.
This need for capital directly conflicts with the constraints of a nonprofit structure. Hence the transition. By converting into a PBC, OpenAI will be able to attract new investments and, perhaps, even go public at some point. However, the company is eager to make it clear that its ultimate goal remains unchanged: the nonprofit organization would still be at the helm.
The agreement with Microsoft is not new, but this MOU does signal a new stage. The tech giant has been OpenAI’s largest investor since 2019, enjoys preferential access to its technologies, and serves as its primary cloud services provider. However, OpenAI’s exponential growth has generated tensions, particularly regarding intellectual property and technological autonomy.
In recent months, OpenAI has worked to diversify its network of partners. Yesterday we reported on its multimillion-dollar contract with Oracle for 2027, and a few weeks ago we discussed its alliance with SoftBank to launch the ambitious project Stargate. All indications are that the company intends to lessen its dependence on Microsoft, just as it is redefining its legal structure.
The transition still requires approval from state regulators in California and Delaware. The attorneys general of both states are already involved in the process, and both OpenAI and Microsoft have publicly stated that they will continue working closely with these authorities to reach a definitive agreement.
In the meantime, OpenAI has already begun to step up its altruistic efforts: it has launched a fifty-million-dollar grant program to support AI literacy initiatives, community innovation, and economic opportunity generation. This serves as a sort of statement of intent to reassure those who regard this structural evolution with skepticism.
Not everyone is applauding OpenAI’s shift. Organizations such as Encode and The Midas Project have openly questioned the change, accusing the company of betraying its founding mission. And, unsurprisingly, Elon Musk — co-founder of OpenAI and now a plaintiff — has not missed the chance to intensify the controversy, alleging that the organization has lost its nonprofit soul. He even made a takeover bid worth 97 billion dollars, which the board promptly rejected.
Some interpret this offensive as part of a broader war among tech giants vying to shape the AI agenda. OpenAI, for its part, has struck back with legal subpoenas, arguing that certain critical groups are financed by competitors such as Musk or Zuckerberg.
Photo: Depositphotos
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