OpenAI restructure plan gets SoftBank blessing as AI startup reportedly renegotiates Microsoft terms

OpenAI said last week that it would restructure in a format that allows its non-profit entity to retain ultimate control, a plan that on Tuesday received the blessing of one of the U.S. artificial intelligence startup’s biggest backers — Japanese giant SoftBank.

The endorsement of SoftBank — the first time the company has publicly green lit the plan — is key because the Japanese firm’s $30 billion investment in OpenAI announced this year was contingent on a change in structure.

In March, OpenAI closed a $40 billion funding round, receiving $30 billion from SoftBank. But if OpenAI doesn’t restructure into a for-profit entity by Dec. 31, SoftBank has previously said it could reduce its portion of the financing to $20 billion.

OpenAI announced this month that it would not fully turn into a for-profit entity after pressure from civic leaders and former employees. Instead, the non-profit arm would retain control of the company, while the limited liability company, which handles all of the business operations, would turn into a public benefit corporation. That means this division will have the ability to generate profit, but will also focus on social good.

The AI startup was originally looking to remove the control of the non-profit, a plan that drew criticism from many in the tech space, including rival and initial OpenAI co-founder Elon Musk.

Since the non-profit would retain control, and the original restructure plan was ditched, it was unclear if OpenAI’s major investors were on board.

But SoftBank’s finance chief Yoshimitsu Goto said during an earnings press conference on Tuesday that “nothing has really changed.”

“I don’t think that’s the wrong direction … that’s something that we expected,” Goto said, according to a company translation of his comments in Japanese.

He reiterated that OpenAI needs to complete the restructure by the end of this year.

There could still be stumbling blocks along the way. Microsoft, one of OpenAI’s biggest investors, has not approved the restructure, according to a Bloomberg report earlier this month. The Financial Times on Sunday reported that OpenAI and Microsoft are rewriting the terms of their multibillion-dollar partnership. Microsoft is the key holdout to OpenAI’s restructure plan, the FT added.

SoftBank’s Goto did not mention any other companies, but acknowledged that OpenAI has many stakeholders.

“Our conversation is based on the assumption that the reorganization will take place. There are different staekholders however and some people may intervene in this project and this may not go as smooth as we hope,” Goto said.

“But that’s out of our control. We will wait and see what happens.”