Developing artificial intelligence that lives up to the hype will take trillions of dollars of investment. So for OpenAI chief Sam Altman, the fact that the leader of the field could not easily raise new money was a big problem. A restructuring deal agreed with key shareholder Microsoft on Tuesday makes OpenAI a little more like a normal company. But only a little.
The gist of this outlandishly complex reshuffle: Microsoft will swap its stake in an OpenAI subsidiary in which profit is capped, taking instead shares in a new vehicle with no such profit limits. That new vehicle, OpenAI Group, can then raise cash from anyone it wants — starting with Japan’s SoftBank, which had made a $30bn investment conditional on getting this transformation done.
Microsoft has been paid handsomely for playing ball. Where previously its investment returns were restricted to about $100bn, its new stake is worth $135bn, based on OpenAI’s latest valuation from private share sales. If the ChatGPT owner achieves human-beating “artificial general intelligence” — a leap that could be worth tens of trillions in market value — it will be worth far more, even though Microsoft’s roughly one-quarter stake will be diluted over time.