OpenAI must complete its transition to a for-profit entity by the end of the year to unlock the full $40 billion funding package led by SoftBank, according to a source familiar with the matter.
If the Microsoft-backed AI powerhouse fails to meet this restructuring deadline, SoftBank has the option to scale back its investment to $20 billion, significantly reducing the funding available for OpenAI’s ambitious growth plans.
The Wall Street Journal first reported the development, highlighting the increasing urgency for OpenAI to finalize its shift from a non-profit research lab to a fully for-profit enterprise. Originally, the company had a two-year timeline from its last funding round to complete the transition.
OpenAI has maintained that restructuring is crucial to raising the vast capital required for developing cutting-edge AI models and maintaining its competitive edge in the rapidly evolving artificial intelligence industry. The pressure is now on for the company to navigate the complexities of its legal and operational overhaul before the deadline arrives.