OpenAI and Microsoft sign nonbinding MOU to form public-benefit corp

OpenAI and Microsoft announced on Thursday that they have signed a nonbinding memorandum of understanding to reshape their partnership and clear the way for OpenAI to restructure its for-profit operations into a public benefit corporation, a move that could let the company raise new capital and eventually go public. The agreement, described in a joint statement and a blog post by OpenAI Board Chairman Bret Taylor, outlines plans for the nonprofit arm to continue governing OpenAI’s mission while taking a large equity stake in the new PBC structure.

The companies said they have signed a nonbinding MOU for the next phase of their partnership and are working to finalize contractual terms in a definitive agreement. The MOU does not by itself change legal obligations, the companies noted, and the plan must still clear approval from state regulators. Taylor said OpenAI is coordinating with the attorneys general of California and Delaware, where it is incorporated, as part of the transition process.

Under the proposed plan, OpenAI’s nonprofit would receive an equity stake in the PBC valued at more than $100 billion, according to Taylor’s memo, a recapitalization the board said would...