Microsoft and OpenAI have signed a new agreement: the company is valued at $500 billion

Microsoft and OpenAI have announced a new agreement that allows the developer of ChatGPT to reorganize into a public benefit corporation. Following this move, OpenAI has been valued at $500 billion and could potentially go public.

This was reported by Reuters, citing an official statement from the companies.

Under the terms of the agreement, Microsoft will own approximately 27% of the shares in the new structure, OpenAI Group PBC, equivalent to $135 billion. Control of the company will remain with the non-profit OpenAI Foundation.

The deal removes the main restriction that made it difficult for OpenAI to attract investment. The organization was initially created as a non-profit project focused on artificial intelligence safety, but in 2019 it signed an agreement with Microsoft, which received significant rights to OpenAI’s developments in exchange for access to powerful cloud computing.

Following the news, Microsoft shares rose 2.5%, and the deal itself paves the way for OpenAI’s possible IPO.

The companies will continue to work closely together until at least 2032, thanks in part to a large cloud computing contract.

Microsoft will continue to have certain rights to OpenAI’s products and models, even if the company achieves artificial general intelligence (AGI) — that is, the ability of AI to match the intelligence of a well-educated human.

Under the new agreements, an independent commission must confirm any claims by OpenAI that it has achieved AGI.

Microsoft has invested a total of $13.8 billion in OpenAI, and the new deal means the company has made nearly ten times its investment.

Read more: OpenAI has unveiled its own browser, ChatGPT Atlas. What can it do?