Microsoft’s Silent Role in OpenAI’s Restructuring Plan Explained

Billionaire Elon Musk has won! After receiving a flurry of criticism over its plans from former employees, experts, and even a lawsuit from Musk, the battle over OpenAI’s business model has finally come to an end today. The ChatGPT maker on Monday announced that the company will continue to run as a “non-profit” organisation.

Scrapping the long-running debate to turn OpenAI into a “for-profit” company, CEO Sam Altman said it will remain under the control of its founding non-profit board.

“OpenAI was founded as a non profit, is today a non profit that oversees and controls the for-profit, and going forward will remain a non profit that oversees and controls the non-profit. That will not change. We have made the decision after hearing from civic leaders and having discussions with the offices of the Attorneys General of California and Delaware,” Altman wrote in an official blog.

However, OpenAI still has plans to change its for-profit division into a Public Benefit Corporation (PBC) --- a legal structure that allows companies to pursue profit while prioritising broader social impact. Some other US companies, including Anthropic and xAI, have also adopted similar models.

With this move, OpenAI becomes more lucrative to investors. In fact, SoftBank has decided to move ahead with its $30 billion investment, according to Bloomberg reports. But Microsoft --- its current largest investor --- is yet to weigh in.

Inside Microsoft’s Role

Microsoft has not given its consent to the AI giant’s restructuring plan. It reportedly wants to ensure that OpenAI’s new structure protects its investment. Currently, the ChatGPT maker is negotiating with Microsoft on the same, Bloomberg reported.

“We look forward to advancing the details of this plan in continued conversation with them, Microsoft, and our newly appointed non-profit commissioners,” Altman added.

The Satya Nadella-led company’s relationship with OpenAI is unlike any other investor's, thanks to its exclusive licensing and revenue-sharing agreements with the tech giant. The Bloomberg report stated that Microsoft is now renegotiating various things, including its equity stake and broader contractual terms.

At the same time, OpenAI faces two parallel challenges: securing continued support from Microsoft and regulatory authorities, and fending off a legal battle from Musk, who is contesting the restructuring.

Musk vs Altman

Musk and Altman were the early investors and cofounders of OpenAI in 2015, with Musk first guiding the AI research organisation's path. However, Musk parted ways with OpenAI in 2018, claiming disagreements about the organisation's goals and safety regulations for the development of artificial general intelligence (AGI).

Musk has since been an outspoken opponent of OpenAI's strategy, especially after the business transitioned from a non‑profit to a capped‑profit model in 2019.

Originally, OpenAI’s founders approached Musk to fund a non‑profit focused on developing AI to benefit humanity, but it is now focused on making money, the billionaire said in a lawsuit against Altman and OpenAI. In December, he even asked the judge to stop OpenAI from transitioning to a non‑profit.

In response, OpenAI also said it will move to dismiss Musk’s claims against the company and that the billionaire should be competing in the marketplace rather than the courtroom.

The xAI CEO has launched various lawsuits against OpenAI and Sam Altman, alleging that the ChatGPT owner violates licensing agreements and antitrust laws. In one of his cases, Elon Musk claims that OpenAI and Sam Altman exploited him from the start when they 'lured' him into co‑founding the business.