Microsoft and OpenAI have reached a tentative agreement on the terms of their partnership after disputes over governance and future equity stake threatened to rupture the high-stakes alliance.
In a joint statement on Wednesday, the companies said they signed a “non-binding memorandum of understanding (MOU) for the next phase of our partnership.”s
“We are actively working to finalize contractual terms in a definitive agreement. Together, we remain focused on delivering the best AI tools for everyone, grounded in our shared commitment to safety,” the statement said.
Spokespeople for OpenAI and Microsoft did not respond to a request for comment from Business Insider.
OpenAI’s deal with Microsoft represents a major development in the partnership between the storied tech titan and a leading AI powerhouse.
Microsoft, a crucial source of funding for OpenAI, has invested over $13 billion into the startup, starting back in 2019, in exchange for a contractual claim on future profits.
How much Microsoft would get has been one of the few sticking points for the two companies.
Business Insider’s Ashley Stewart previously reported that there has additionally been contention over exactly how much access Microsoft gets to OpenAI’s intellectual property.
Landing a deal with Microsoft has been a crucial step for OpenAI’s ambition to restructure its organization.
Because Microsoft is a major investor in the startup, any restructuring would require the company’s sign-off.
On Thursday, along with the announcement of the deal, OpenAI revealed a new structure in which the startup’s nonprofit arm will take control of its for-profit entity, allowing the nonprofit to maintain control via board power.
The setup gives OpenAI more leeway in how it distributes equity and, as a result, more room to attract investors as the startup rapidly burns through billions of dollars of cash.
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