Microsoft and OpenAI Signed a New Agreement

Microsoft and OpenAI signed a new agreement

Microsoft and OpenAI reached an agreement under which the AI creator ChatGPT can change its structure to a public company with a social mission, valuing OpenAI at $500 billion.

According to Reuters, this agreement removes one of the main restrictions on attracting investment that had been imposed on OpenAI since 2019.

This restriction stemmed from a contract with Microsoft that gave the tech giant the right to use a major part of OpenAI’s products and research in exchange for providing costly cloud computing services.

With the rising popularity of ChatGPT, these restrictions had become a major source of tension between the two companies.

According to both parties, Microsoft will hold about 27% of OpenAI Group’s shares, valued at $135 billion, which will be controlled by the non-profit OpenAI Foundation.

Microsoft has invested $138 billion in OpenAI so far, and under this agreement, it has achieved a return close to 10 times its initial investment.

Microsoft’s shares also increased by 25%, bringing the company’s market value back to over four trillion dollars.