Microsoft and OpenAI have a new deal that could clear the way for an IPO

Microsoft and OpenAI have signed a non-binding memorandum of understanding (MOU) to outline the next phase of their partnership. The two companies remain focused on delivering the best AI tools, grounded in their shared commitment to safety. Microsoft has invested $13 billion in OpenAI since 2019 and shares in the revenue earned by ChatGPT and its API. However, Microsoft now views OpenAI as a competitor and is increasing its reliance on its own AI models. The agreement also states that OpenAI's nonprofit parent company will continue to hold authority over the for-profit business, with an equity stake worth more than $100 billion. This unusual restructuring plan has faced pushback from other philanthropies and nonprofits, and investigations have been opened by the attorneys general of California and Delaware. Both Microsoft and OpenAI have committed to significant investments in their own AI models, with Microsoft's AI chief stating that the company should have the capacity to build world-class frontier models while also being pragmatic in using other models when necessary.