Microsoft could end up with substantial equity in the restructured, for-profit OpenAI
Microsoft and OpenAI are reportedly negotiating over how much equity the former will get in OpenAI once OpenAI converts to a for-profit.
How much equity in OpenAI will Microsoft get once the former becomes a for-profit company? That’s the multibillion-dollar question — one the two parties are racing to answer ahead of a two-year deadline.
The Wall Street Journal reports that both Microsoft and OpenAI have hired investment banks to negotiate Microsoft’s equity — which could be substantial. The tech giant is said to have sunk nearly $14 billion into OpenAI. As of October, OpenAI is the second-most valuable startup in the U.S. behind SpaceX.
Among other issues, Microsoft and OpenAI must resolve how much equity will go to CEO Sam Altman and OpenAI employees, as well as which specific governance rights Microsoft will have. Once OpenAI converts to a for-profit, it’ll become a public-benefit corporation, but with a nonprofit component that’ll own equity in the restructured company.
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