OpenAI, the creator of ChatGPT, has announced a new tentative, nonbinding agreement with Microsoft, its long-standing partner, signaling the "next phase of our partnership." As part of this significant restructuring, OpenAI stated that its nonprofit entity, which maintains technical control over its business operations, will be granted a substantial $100 billion equity stake in its for-profit corporation. These announcements, made on a recent Thursday, provided initial details regarding these new arrangements, which have already attracted considerable scrutiny from regulators, competitors, and advocacy groups concerned about the broader implications of artificial intelligence.

Founded in 2015 as a nonprofit research lab, OpenAI’s corporate structure has seen its nonprofit board retain oversight of the for-profit subsidiary responsible for developing and commercializing its AI products. The precise nature of the $100 billion equity stake — specifically, whether it constitutes a controlling interest in the business — remains undefined. This corporate evolution has not gone unnoticed by legal authorities, with California Attorney General Rob Bonta confirming an investigation into OpenAI’s proposed financial and governance restructuring. While his office refrained from commenting directly on the new announcements, they reiterated a commitment to safeguarding charitable assets for their intended purpose.

Further compounding regulatory interest, Attorney General Bonta, alongside Delaware Attorney General Kathy Jennings, previously conveyed concerns to OpenAI regarding the safety of ChatGPT. This engagement followed a meeting with OpenAI’s legal team in Delaware, where the company is incorporated. Bonta emphasized the collective concern for ensuring that OpenAI’s stated safety mission, stemming from its nonprofit origins, remains paramount in its operational priorities.

The partnership between OpenAI and Microsoft began with Microsoft’s initial $1 billion investment in 2019. This led to an agreement designating Microsoft as the exclusive provider of the extensive computing power necessary for OpenAI’s technological development. In return, Microsoft leveraged the foundational technology of ChatGPT to enhance its own suite of AI products. A notable shift occurred on January 21, when the two companies announced an alteration to their agreement, enabling OpenAI to develop its own computing capacity, primarily for research and model training. This move coincided with OpenAI’s disclosure of a partnership with Oracle to construct a substantial new data center in Abilene, Texas. Despite these developments, other facets of their complex agreement with Microsoft are still pending finalization, as reflected in their joint statement acknowledging active efforts to "finalize contractual terms in a definitive agreement."

OpenAI’s corporate governance also includes its nonprofit board of directors, now featuring a former U.S. Treasury secretary among its members. This board is tasked with the critical responsibility of determining when OpenAI’s AI systems achieve Artificial General Intelligence (AGI), defined as the point at which AI systems "outperform humans at most economically valuable work." Under prior agreements, reaching this AGI milestone would terminate Microsoft’s rights to commercialize such a system, as the terms were designed to apply exclusively to "pre-AGI technology."

Adding another layer of complexity, OpenAI’s corporate structure and commitment to its nonprofit mission are central to a lawsuit filed by Elon Musk. Musk, a co-founder of the nonprofit research lab and an initial financial backer, is seeking to prevent OpenAI from divesting control from its nonprofit entity, alleging a betrayal of its foundational promise to develop AI for the collective benefit of humanity.