Microsoft and OpenAI have signed a non-binding deal for new relationship terms that would allow the ChatGPT maker to proceed to restructure itself into a for-profit company.
The Thursday, September 10, talk details have not been disclosed; however, the companies said they were working to finalise terms of a definitive agreement.
This deal marks a step forward in OpenAI's efforts to raise funds and change its structure to eventually go public and support AI development.
Microsoft invested $1 billion in OpenAI in 2019 and another $10 billion at the beginning of 2023.
Under their previous agreement, Microsoft had exclusive rights to sell the tech giant's software tools through its Azure cloud computing platform and had preferred access to the startup's technology.
As OpenAI's revenue grows into the billions, it is seeking a more conventional corporate structure and partnerships with additional cloud providers to expand sales and secure the computing capacity needed to meet demand.
Despite the hurdles posed by attorneys general in California and Delaware for the approval of OpenAI's new structure, the company hopes to complete the conversion by year's end or risk losing billions in funding tied to that timeline.
Notably, Microsoft and OpenAI are rivals in AI products, including chatbots and business tools. Microsoft has also been working on developing its own AI models to reduce its dependence on OpenAI's technologies.