Microsoft, OpenAI reach deal removing fundraising constraints

REUTERS

The new OpenAI Group PBC will function more like a traditional company, cementing Altman’s power and giving him more leeway to strike deals, raise money and shape the broader AI industry. Microsoft will not have rights to any consumer hardware produced by OpenAI, and no longer has the right of first refusal to be OpenAI’s compute provider.

Even so, Microsoft will hold a 27% stake in OpenAI and remain a significant player in its future. OpenAI will continue to share about 20% of its revenue with Microsoft for years to come, people familiar with the matter said.

Microsoft’s previous 2019 agreement had many provisions that rested on when OpenAI reached artificial general intelligence, and the new deal requires an independent panel to verify OpenAI’s claims that it has reached AGI, the point at which AI systems can match a well-educated human adult.

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