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OpenAI Inc
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== Ownership structure == [[File:Org-structure.svg|thumb|600x600px]]-OpenAI's unique ownership structure reflects its transition from a non-profit organization to a capped for-profit entity. Initiated in 2019, this change set a limitation on investor profits, capping returns at a maximum of 100x on any investment made into the company. This unprecedented structure was engineered with the ambitious goal of developing artificial general intelligence (AGI), which has the potential to unlock vast economic value, but also necessitates responsible wealth distribution. -In addition to transforming its organizational status, OpenAI entered into a strategic partnership with Microsoft. Microsoft invested $1 billion and became OpenAI’s exclusive cloud provider. This alliance not only provided OpenAI with essential capital but also with a robust cloud infrastructure to facilitate its research and development activities. -Two years after Microsoft's initial investment, OpenAI’s ownership diversified further through a stock sale to reputable venture capital firms. These included Sequoia Capital, Tiger Global Management, Andreessen Horowitz, and Bedrock Capital. These investments served to bolster OpenAI's capital base and potentially provided strategic advantages through the VC firms' extensive networks and expertise. Come 2023, reports emerged that Microsoft was considering an additional $10 billion investment in OpenAI, which would value the company at an estimated $29 billion. This proposed deal has a rather distinctive structure. Microsoft would be entitled to 75% of OpenAI’s future profits until the $10 billion investment is recouped. Following that, Microsoft's share of the profits would drop to 49% until it reaches its own capped return, the details of which would be defined in the final agreement. This structure underscores the symbiotic relationship between the two entities while also aligning with OpenAI’s capped profit ethos. -Notably, OpenAI's capped profit structure also extends to limited partners (LPs). Once an LP reaches their maximum return of 100x, as set by individual agreements, the ownership remains but the profits accrue to OpenAI LP, the organizational body overseeing OpenAI’s operational aspects. This setup ensures that after fulfilling the capped returns for its limited partners, OpenAI would essentially become a self-sustaining entity. -The driving force behind this intricate structure is OpenAI’s mission to responsibly develop AGI. The belief is that if AGI were to be achieved or approximated, it could generate trillions of dollars in economic value. Given OpenAI’s origins as a non-profit with a focus on the ethical implications of AI, the capped-profit structure aims to allow for the redistribution of this immense wealth to the public through a non-profit foundation. -As of 2023, other venture capital firms like Thrive Capital and Founders Fund have also expressed interest in acquiring existing shares of OpenAI, indicating the growing investor interest in the company’s technological ambitions and unique economic model.
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