TMTPOST --   OpenAI   on   Thursday suggested it is moving closer   to   its   planned restructure   as the ChatGPT   maker reached a   tentative deal with   its largest investor   Microsoft   Corporation, a move seen   as part of   effort to facilitate the plan.  

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OpenAI in May said   its   for-profit   LLC, which has been under the nonprofit   parent   since 2019, will transition to a Public Benefit Corporation ( PBC ) – a purpose-driven company structure that has to consider the interests of both shareholders and the mission. Started   as a nonprofit, OpenAI   is and   will   continue to be overseen and controlled by that nonprofit, the startup   stressed.

In a statement released on Thursday, OpenAI   Chairman Bret Taylor   said it will continue   to be held by   the nonprofit parent   that guides its   future, and will give the parent   an   equity   stake of more than $100 billion,   "making it one of the most well-resourced philanthropic organizations in the world."    Taylor   said such   recapitalization   will allow   OpenAI   to   continue to raise the capital   required   to accomplish its   mission:   ensuring artificial general intelligence ( AGI )   benefits   all of humanity   .

That stake, if come true, represents a roughly 20% share of OpenAI   once it completes an   over   $4 billion secondary share sale   at a $500 billion   valuation. The startup last week   was reported to be   giving eligible current and former employees the opportunity to sell roughly $10.3 billion in stock, up from the $6 billion it was initially targeting.

"This structure reaffirms that our core mission remains ensuring AGI benefits all of humanity. Our PBC charter and governance will establish that safety decisions must always be guided by this mission,"   said Taylor, adding that it is working closely with the California and Delaware Attorneys General to establish its structure.

Taylor   disclosed   the OpenAI   nonprofit has launched a call for applications for the first wave of a $50 million grant initiative to support nonprofit and community organizations in three areas: AI literacy and public understanding, community innovation, and economic opportunity. Taylor   called the   initiative   a   beginning   as   its   recapitalization,   if materialized,   would unlock the ability to do much more.

In   a joint statement on Thursday,   OpenAI and Microsoft   announced   they   had signed a non-binding   memorandum of understanding   ( MOU )   for the next phase of their   partnership,   without providing   any   details of the deal. "We are actively working to finalize contractual terms in a definitive agreement,"   said   two companies   .

The MOU   could   set the stage for OpenAI ’ s   restructure and   eventually public   listing. "Together, we remain focused on delivering the best AI tools for everyone, grounded in our shared commitment to safety," the companies said in their   joint statement.

As of last October, Microsoft has invested $13.75 billion in OpenAI since 2019, including its share of the startup ’ s $6.6 billion fundraising in October. Such massive investment entitles Microsoft to a percentage of OpenAI ’ s profits.  

The Wall Street Journal last year reported OpenAI has had agreed its profit distribution would go through four phases. At the first phase, OpenAI shall use its first $194 million in profits to pay back its first investors, and at the second phase, it shall split its next $17.3 billion in profits between its first invesors and Microsoft, with Microsoft receiving 75% of profits until it has recouped its $13 billion investment. At the third phase, OpenAI pay 49% of its profits to Microsoft until a predetermined cap is reached, and at the last phase, it will retain all profits once Microsoft has reached its predetermined return cap.

OpenAI and Microsoft are renegotiating the terms of their multibillion-dollar alliance in a move that could clear a path for the ChatGPT creator to go public, while preserving Microsoft ’ s access to cutting-edge AI technology, the Financial Times reported in May. At the heart of the talks is Microsoft ’ s investment in OpenAI and how much equity it will hold in the company ’ s restructured for-profit arm. According to the report, Microsoft is willing to give up part of its stake in exchange for extended rights to AI technologies developed beyond the current 2030 licensing cutoff. The partners are also reportedly reworking a broader commercial agreement that dates back to 2019, when Microsoft made its initial $1 billion bet on OpenAI.

Neither   OpenAI   nor Microsoft on Thursday disclosed   disclose how much of OpenAI stake   Microsoft would own after the restructuring, or whether Microsoft would retain exclusive access to OpenAI's latest models.   The   new deal may   make sure Microsoft ’ s continued access to OpenAI ’ s technology even if the startup achieves   AGI, which refers to humanlike AI capabilities that would have terminated their current partnership under existing terms.