OpenAI’s Nonprofit Parent to Own More Than $100B Stake in ChatGPT Maker

OpenAI said its nonprofit parent will have an equity stake exceeding $100 billion in the ChatGPT maker, making it “one of the most well-resourced philanthropic organizations in the world.”

OpenAI, which said the “recapitalization would also enable us to raise the capital required to accomplish our mission,” also said it and backer Microsoft (MSFT) had signed a non-binding memorandum of understanding to extend their partnership, and were “actively working to finalize contractual terms in a definitive agreement.”

OpenAI had initially announced plans last year to transform into a for-profit company, a condition for money it raised in funding rounds, including one where it raised $6.6 billion from investors including Microsoft and AI chip darling Nvidia (NVDA). Becoming a for-profit company would allow OpenAI to make financial returns for its shareholders and also go public, marking a departure from its original mission of building open-source technology that wouldn’t be subject to commercial priorities.

Microsoft Agrees to Unbundle Teams in EU

Separately, Microsoft avoided a potentially massive antitrust fine from the European Union by striking a deal to unbundle its Teams communication platform from its popular office apps.

The European Commission, the EU’s enforcement arm, said it has accepted the moves by Microsoft to untie Teams from its productivity applications Word, Excel, PowerPoint, Outlook, included in its Office 365 and Microsoft 365 suites for business customers. Microsft will now make these apps available to consumers without Teams at a lower price, allow customers tied to longer licenses to switch and let customers move their data out of Teams to use competitors.

Microsoft shares, which entered Friday up by almost a fifth this year, are rising 1.4% in premarket trading.