OpenAI said it has reorganized its ownership structure and converted its business into a public benefit corporation

OpenAI is giving its long-time backer Microsoft Corp. a 27% ownership stake as part of a restructuring plan that took nearly a year to negotiate, removing a major uncertainty for both companies and clearing the path for the ChatGPT maker to become a for-profit business.

The new agreement values Microsoft’s 27% stake at $135 billion and extends its IP rights through 2032, giving Microsoft investors “upside optionality.”

Microsoft and OpenAI announced the long-awaited details of their new partnership agreement Tuesday morning — with concessions on both sides that keep the companies aligned but not in lockstep as they move into their next phases of AI development.

Microsoft and OpenAI on Tuesday said they had reached a deal to allow the ChatGPT maker to restructure itself into a public benefit corporation, valuing OpenAI at $500 billion and clearing the way for it to become a publicly traded company.

The restructuring ends years of capital constraints for OpenAI, and grants Microsoft long-term technology access and new AGI rights under the updated deal.

OpenAI said Tuesday it has reorganized its ownership structure and converted its business into a public benefit corporation and two crucial regulators, the Delaware and California attorneys general, said they would not oppose the plan.