OpenAI completes shift to becoming for-profit entity

OpenAI has completed its transformation into a for-profit entity, which could allow it to attract billions of dollars in investment and potentially clear the way for a stock market debut.

As part of the agreement, OpenAI and Microsoft announced changes to their partnership that will see the tech giant own a 27% stake in the ChatGPT maker.

The deal changes the relationship between the two companies, which first partnered in 2019 when OpenAI was a nonprofit artificial intelligence (AI) research organization.

Under the terms, Microsoft can now develop artificial general intelligence (sometimes defined as AI that exceeds human intelligence) on its own or in collaboration with other parties, the companies said.

OpenAI also said it is convening a panel of experts that will test any claims the company makes that it has achieved general artificial intelligence.

The company did not say who would sit on the panel when approached by the BBC.

Microsoft will also support OpenAI's board of directors in transforming it into a commercial entity, in which CEO Sam Altman will not have a stake, Bloomberg first reported.

The initial partnership between the companies gave Microsoft the rights to much of what OpenAI produced at a time when the startup needed cloud computing resources.

Since then, OpenAI has struck deals with a host of other major tech players, leading to speculation that artificial intelligence bubble maybe in the near future.

The revised deal extends Microsoft's rights to OpenAI's artificial intelligence models until 2032 but excludes consumer hardware.

Microsoft's market capitalization topped $4 trillion on Tuesday for the second time since the announcement.

It first reached the milestone in July, after chip designer Nvidia became the second publicly traded company to do so.

OpenAI brought AI to the mainstream in 2022 with the introduction of ChatGPT.

At the company's DevDay event in San Francisco earlier this month, Altman said the company had reached 800 million weekly active users.

OpenAI, now valued at $500 billion, has released a slew of new products aimed at increasing the level of interaction with its artificial intelligence tools.

These include a browser based on artificial intelligence. ChatGPT Atlaswhich competes with Google Chrome, and a video creation tool called Sora.

But the company also regularly finds itself at the center of controversy.

Last week OpenAI blocked Sora 2 created deepfake videos of Dr. Martin Luther King Jr. following intervention by the late civil rights leader's family.

OpenAI also recently stated that ChatGPT will launch soon. resolution of erotica for verified adults.

Meanwhile, critics say OpenAI understated the potential mental health consequences of the artificial intelligence tools they blame are created with few hurdles in the pursuit of profit.