"The deal removes a major constraint on raising capital for OpenAI, the maker of ChatGPT, and values the firm at $500bn. Microsoft and OpenAI have reached a deal to allow the ChatGPT maker to restructure itself into a public-benefit corporation, valuing OpenAI at $500bn and giving it more freedom in its business operations. The deal, unveiled on Tuesday, removes a major constraint on raising capital for OpenAI that has existed since 2019."
"At the time, it had signed an agreement with Microsoft that gave the tech giant rights over much of OpenAI's work in exchange for costly cloud computing services needed to carry it out. As its ChatGPT service exploded in popularity, those limitations had become a notable source of tension between the two companies. Microsoft will still hold a stake of about $135bn, or 27 percent, in OpenAI Group PBC, which will be controlled by the OpenAI Foundation, a nonprofit, the companies said."
OpenAI will restructure into a public-benefit corporation valued at $500bn, removing a longstanding constraint on raising capital tied to its 2019 agreement with Microsoft. That 2019 deal granted Microsoft rights over much of OpenAI’s work in exchange for cloud computing services, limiting OpenAI’s ability to take outside investment and secure computing contracts. Microsoft will retain roughly a 27% stake (about $135bn) in OpenAI Group PBC and maintain a large cloud contract and certain rights to products and models through at least 2032, even if OpenAI reaches AGI. ChatGPT has more than 700 million weekly users and drove the firm’s rapid growth.
Read at www.aljazeera.com
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