Microsoft and OpenAI Unite with New Agreement

Microsoft and OpenAI have reached an agreement that allows the ChatGPT creator to be restructured as a non-profit organization. This agreement values OpenAI at 500 billion dollars and provides more freedom for the company's operational activities.

As of September, with 700 million weekly users, ChatGPT has increased its popularity, becoming the face of artificial intelligence for many consumers. The agreement removes barriers that were placed on the capital supply, which were significant limitations on the company’s operations resulting from a deal made between OpenAI and Microsoft in 2019.

As ChatGPT rapidly increased its user base, these restrictions had become a significant source of tension between the two companies. A spokesman for OpenAI stated that CEO Sam Altman would not take shares in the restructured company and, contrary to the negotiations from last year, there are no plans for going public.

Microsoft will hold about 135 billion dollars or a 27% stake in the OpenAI Group, which will be controlled by the non-profit OpenAI Foundation. The 500 billion dollars valuation set for OpenAI indicates that Microsoft has achieved nearly tenfold returns on its investment.

Microsoft's shares rose by about 4% on Tuesday morning, pushing its market value back above 4 trillion dollars. An analyst stated that this agreement resolves the long-awaited issue regarding OpenAI being organized as a non-profit organization and clarifies ownership rights with Microsoft over the technology. The new structure will clarify OpenAI's investment path, thereby facilitating new funding processes.

Additionally, PayPal signed an agreement with OpenAI on Tuesday, allowing ChatGPT users to purchase products through the payment platform. This situation increased PayPal shares by 13% on Tuesday morning. PayPal stated that the integration of its platform with OpenAI will make millions of products discoverable and purchasable through ChatGPT.