Microsoft is close to getting a giant new equity stake in OpenAI. It could be worth at least $150 billion.

"OpenAI announced last week that it's restructuring itself into a for-profit public benefit corporation. The move will create traditional stock that enables investors to get equity stakes in the business. As part of this, Microsoft will likely get a new equity stake in OpenAI that could be worth at least $150 billion, according to analysts at BNP Paribas and other estimates."

"If the restructuring happens as planned, Microsoft would receive a more than tenfold return in just a few years, rivaling other famously successful investments by Big Tech companies. For instance, Google bought YouTube for $1.65 billion in 2006. These two investments took more than a decade to play out, whereas Microsoft's return on its OpenAI investments has grown much more quickly."

Microsoft invested $1 billion in OpenAI in 2019 when OpenAI operated as a nonprofit research lab. The software giant added billions more to the partnership in early 2023 after ChatGPT's launch. OpenAI is restructuring into a for-profit public benefit corporation that will create traditional stock and enable investors to obtain equity stakes. Analysts estimate Microsoft will receive a new equity stake that could be worth at least $150 billion. Microsoft invested about $13 billion to acquire its stake. If the restructuring occurs, Microsoft would realize more than a tenfold return within a few years. The original partnership included unusual profit-sharing units and Azure cloud credits.

Read at Business Insider