Check-Cap to merge with MBody AI in embodied AI workforce push
Updates at 20:30 ET (00:30 GMT) with additional context, Microsoft share move
Investing.com - Microsoft (NASDAQ:MSFT) and OpenAI said on Thursday evening that they had reached a non-binding agreement over the artificial intelligence start-up’s plans to transition to a for-profit organization.
Microsoft shares rose 1.7% in after-market trade following the announcement.
No terms of the agreement were released by the companies, who in a joint statement said the agreement was for the “next phase” of their partnership. The two said they are “actively working to finalize contractual terms in a definitive agreement.”
Separately, OpenAI said the company’s non-profit entity will hold an over $100 billion equity stake in its for-profit arm, which it is touting as a “public benefit corporation.” OpenAI’s non-profit arm will also hold overall decision-making authority in the firm, the company signaled.
The company said its core goal remained to develop AI superintelligence. The agreement with Microsoft marks another step in OpenAI’s quest to build out its for-profit ambitions and draw in more capital and business.
The company was founded in 2015 as a non-profit, and in 2019 had created a for-profit arm– a limited liability company with capped profits. This allowed the startup to raise capital and grant equity to employees.
But the company began facing increasing pressure to focus on profitability from investors, especially as the cost of running its flagship AI programs grew exponentially. This was especially after ChatGPT’s breakthrough success in late-2022, which essentially kicked off the AI race.
OpenAI’s for-profit ambitions will allow the firm to raise capital through more conventional governance, while also opening the door to an eventual initial public offering.
A PBC structure still leaves OpenAI obligated to consider the broader social benefits of its business, alongside investor interests.
Microsoft had invested $1 billion in OpenAI in 2019 and another $10 billion in early-2023. The company was initially OpenAI’s sole provider of computing power, although it loosened its grip earlier in 2025, with OpenAI seen planning its own data centers under project Stargate with Japan’s SoftBank Group Corp. (TYO:9984).
Softbank had earlier this year outlined plans to invest up to $40 billion in OpenAI, which could make the Japanese tech conglomerate the biggest stakeholder in the AI startup.
For OpenAI, securing more funding also allows the firm to compete with other deep-pocketed, well-established rivals such as Alphabet’s Google Deepmind and Anthropic.
OpenAI’s ChatGPT essentially kicked off the ongoing AI race with its release in late-2022, which in turn sparked a wave of development and investment in the sector.
The AI startup has repeatedly signaled that developing general AI-- a type of AI that is comparable to, or even surpasses human intelligence-- remains its core goal.