OpenAI becomes a for-profit company
OpenAI has officially completed its shift to a for-profit company, a move that could help it raise billions of dollars in new investment and possibly pave the way for a future stock market listing.
As part of the change, OpenAI and Microsoft announced an updated partnership giving Microsoft a 27% stake in the ChatGPT maker. The two companies first teamed up in 2019, when OpenAI was still a non-profit research lab.
Under the new deal, Microsoft can now develop artificial general intelligence (AGI) — AI that could one day surpass human intelligence — on its own or with other partners.
OpenAI said it will form an independent expert panel to verify any future claims that the company has achieved AGI, though it has not revealed who will serve on it.
Microsoft will continue supporting OpenAI’s board during the transition, but CEO Sam Altman will not receive any personal equity stake in the company, according to Bloomberg.
When OpenAI first partnered with Microsoft, the startup relied heavily on the tech giant’s cloud computing power. Since then, OpenAI has expanded rapidly, striking deals with other major technology firms and fueling speculation about an “AI bubble.”
The revised agreement extends Microsoft’s rights to OpenAI’s AI models until 2032 but does not include consumer hardware.
Following the announcement, Microsoft briefly crossed the $4 trillion market value mark for the second time, having first done so in July.
Rapid Rise of OpenAI
OpenAI shot to global fame in 2022 with the release of ChatGPT, bringing AI tools to millions of users. CEO Sam Altman recently said the company now has about 800 million weekly active users.
Valued at roughly $500 billion, OpenAI has launched several new products, including ChatGPT Atlas, an AI-powered browser competing with Google Chrome, and Sora, a video generation tool.
However, the company has also faced controversy. Last week, it blocked Sora 2 from generating deepfake videos of Martin Luther King Jr. after complaints from his family. OpenAI also announced that ChatGPT will soon allow erotic content for verified adults, sparking debate about safety and ethics.
Critics argue that OpenAI’s push for profit has led it to overlook the mental health and social risks of its powerful AI systems.
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