OpenAI Maneuvers To Launch Its IPO

OpenAI and Microsoft are reportedly reworking the terms of their partnership in a bid to position the younger company for a future initial public offering.

OpenAI must still convince regulators in California and Delaware that its purpose-driven mission remains intact. I Photo: APIPark

With approximately $13 billion invested since 2019, Microsoft is OpenAI’s largest backer, Andrew Nusca reported for Fortune Tech .

Microsoft is also a key stakeholder in the $260 billion startup’s move to undergo a corporate restructuring that brings it closer to profitability—and further away from its nonprofit, for-the-benefit-of-humanity origins.

Open questions, according to a Financial Times report, include how much equity Microsoft would receive in a restructured entity and how much access to OpenAI’s intellectual property it would retain beyond the 2030 expiration of its current contract.

Though the companies remain “close collaborators,” the report notes “a cooling between the companies” as OpenAI’s ambitions increasingly position it in competition with its biggest investor.

Last week, OpenAI dropped its plan to remove the nonprofit board’s control over the for-profit entity. It still intends to convert the for-profit arm into a public benefit corporation—a structure adopted by rivals Anthropic and xAI because it allows them to offer investors equity.

But even if Microsoft supports the move, OpenAI must still convince regulators in California (where it is headquartered) and Delaware (where it is incorporated) that its purpose-driven mission remains intact.