OpenAI just used its most aggressive play yet in its evolution towards commercialization. In a move that may fundamentally change its corporate structure, it has signed a non-binding agreement with Microsoft. On Thursday, OpenAI announced perhaps their most ambitious partnership yet. This amendment will provide them the flexibility they need to move their for-profit arm into a public benefit corporation (PBC). This modification indicates a promising direction in OpenAI’s global operating plan. It demonstrates their continued dedication to ensuring that profit motives are aligned with doing good for society at large.
No surprise then that Microsoft, OpenAI’s biggest backer, has played a prominent role in the narrative around this shift. The two nonprofits have intensely bargained their collaboration for the better part of six months. They work to find common ground and partner on each others’ objectives in the rapidly evolving sphere of artificial intelligence. According to a joint statement from both companies, “Microsoft and OpenAI have signed a non-binding memorandum of understanding (MOU) for the next phase of our partnership.” The statement indicated that they are “actively working to finalize contractual terms in a definitive agreement.”
There’s good reason for the optimism around this partnership. The deal isn’t done yet and still requires regulatory approval before it can start rolling. OpenAI and Microsoft have confirmed that they “continue to work with the California and Delaware Attorneys General” to ensure compliance with relevant regulations as they navigate this transition plan.
The shift to a public benefit corporation comes as pressure on OpenAI’s mission and activities has grown. Elon Musk, a co-founder of OpenAI, recently made some pretty extreme claims. He argues—rebutting rhetoric from the organization itself—that OpenAI, under Altman and President Greg Brockman, has abandoned its original nonprofit mission. Musk’s accusations are the latest salvo in an increasingly contentious legal battle that includes a lawsuit Musk filed against OpenAI.
The most contentious policy negotiations are reportedly in the final stages. Now regulatory bodies will need to step in and play a critical role in determining the fate of this transformative agreement. The underlined provisions in particular would seem to contradict much of the intent behind the open letter signed by California’s and Delaware’s attorneys general. Yet, spokespeople from these offices have not returned TechCrunch’s inquiries on the record.
Maxwell Zeff, a senior reporter for TechCrunch who reported the story as it developed. Significantly, he reflected upon what it means that OpenAI has committed to become a public benefit corporation. This move could influence future partnerships and investment strategies in the tech industry, particularly as AI technology continues to advance at an unprecedented pace.