CoinVoice has learned that OpenAI and Microsoft are in a high-stakes negotiation over an unprecedented question: How should a nearly $14 billion investment in a nonprofit organization be converted into equity in a for-profit company? OpenAI recently completed a round of financing with a valuation of $157 billion and is transforming from a nonprofit organization to a for-profit company.

When it becomes a for-profit company, how to distribute equity is one of the biggest challenges it faces. As OpenAI's largest investor, Microsoft is likely to own a large portion of the company. Given the importance of the negotiation outcome to Microsoft and OpenAI, both companies have hired investment banks to provide consulting services.

Microsoft is working with Morgan Stanley, while OpenAI has chosen Goldman Sachs. In addition to determining how much Microsoft will own after the reorganization, it is also necessary to clarify what governance rights Microsoft will have. [Original link]