OpenAI just took a major step toward going public. The ChatGPT maker and Microsoft signed a new memorandum of understanding Thursday that restructures their complex $13 billion partnership, potentially clearing the biggest hurdle to OpenAI's anticipated IPO at a $500 billion valuation. The move comes as state regulators investigate OpenAI's unusual corporate restructuring plans.
OpenAI and Microsoft just rewrote the rules of their partnership, and it could be the key to unlocking one of tech's most anticipated IPOs. The two AI giants signed a memorandum of understanding Thursday that fundamentally restructures their increasingly tangled $13 billion relationship, removing what many saw as the biggest barrier to OpenAI going public at its eye-watering $500 billion valuation.
The timing isn't coincidental. OpenAI has been frantically working to untangle its corporate structure as it prepares for an IPO that could reshape the entire AI landscape. The company's unusual hybrid model - part nonprofit, part for-profit - has created regulatory headaches that threatened to derail any public offering plans.
But this new deal changes everything. According to OpenAI's statement, the nonprofit parent will maintain control over the for-profit business while holding an equity stake worth more than $100 billion. That's a massive stake that preserves the company's mission-driven roots while creating a clear path to public markets.
Microsoft's role in this evolution tells its own story about how quickly the AI landscape is shifting. The Redmond giant has poured $13 billion into OpenAI since 2019 and shares revenue from ChatGPT and its API. But the relationship has grown complicated as both companies now compete directly in AI markets.
During a company town hall Thursday, Microsoft CEO Satya Nadella and AI chief Mustafa Suleyman made their strategy crystal clear. "We should have the capacity to build world class frontier models in house of all sizes, but we should be very pragmatic and use other models where we need to," Suleyman told employees. Translation: Microsoft is hedging its bets by building its own AI while maintaining the OpenAI partnership.
The new MOU reflects this evolved dynamic. Microsoft now officially lists OpenAI as a competitor, allows the startup to use other cloud providers for compute power, and has ramped up investments in its own AI models. It's a far cry from the exclusive partnership that launched ChatGPT into the mainstream.
