OpenAI Completes Split into Two Entities

OpenAI completed a plan to split the company up by placing its AI laboratory into a for-profit corporation within its non-profit foundation. The non-profit entity is now named the OpenAI Foundation and retains control over the for-profit arm, which was restructured as OpenAI Group, a public benefit corporation.

OpenAI Foundation holds an equity stake in the for-profit company currently valued at approximately $130 billion. The recapitalization also grants the Foundation additional ownership if the for-profit reaches a valuation milestone. OpenAI chairman Bret Taylor noted the structure ensures the value of the non-profit’s stake increases in line with the commercial success. The non-profit side would then use the rising value to fund its philanthropic work.

“We believe that the world’s most powerful technology must be developed in a way that reflects the world’s collective interests,” Taylor explained. “The close of our recapitalization gives us the ability to keep pushing the frontier of AI and an updated corporate structure to ensure progress serves everyone.”

As part of the new structure, the Foundation will own 26% of the for-profit entity, with a warrant allowing it to receive additional shares if OpenAI hits a valuation milestone. Early investor Microsoft holds around 27% of the company, with the remaining 47% held by current and former employees and investors.