Stay ahead with real-time Wall Street scoops.

OpenAI's Restructuring Plan Wins SoftBank's Endorsement

Word on the StreetTuesday, May 13, 2025 3:04 pm ET

1min read

OpenAI, a leading artificial intelligence startup, announced last week that it would undergo a restructuring process, allowing its non-profit entity to retain ultimate control. This plan received recognition from one of its largest investors, the Japanese conglomerate SoftBank, on Tuesday.

SoftBank's endorsement is crucial as the company had previously stated that its $300 billion investment in OpenAI this year was contingent on the startup's structural changes. In March, OpenAI completed a $400 billion funding round, with SoftBank contributing $300 billion. However, SoftBank had indicated that if OpenAI did not restructure into a for-profit entity by December 31, the funding amount could be reduced to $200 billion.

This month, OpenAI announced that, under pressure from civic leaders and former employees, it would not fully transition into a for-profit entity. Instead, the non-profit arm will retain control of the company, while the limited liability company responsible for all business operations will transform into a public benefit corporation. This means the department will have the ability to generate profits but will also focus on social benefits.

Initially, OpenAI had planned to eliminate the non-profit arm's control, a move that drew criticism from many in the tech industry, including competitors and OpenAI's co-founder Elon Musk. With the non-profit arm retaining control and the initial restructuring plan abandoned, it remains unclear whether OpenAI's major investors support the current plan.

However, SoftBank's Chief Financial Officer, Yoshimitsu Goto, stated at a earnings news conference on Tuesday that "essentially, nothing has changed." According to SoftBank's translation of his remarks, Goto said, "I think this direction is correct... This is what we expected." He reiterated that OpenAI needs to complete the restructuring by the end of this year.

Despite SoftBank's support, there may still be obstacles ahead. Earlier this month, a report indicated that one of OpenAI's largest investors, Microsoft, had not yet approved the restructuring plan. It was reported that OpenAI and Microsoft were in the process of redrafting the terms of their multi-billion-dollar cooperation. Microsoft is seen as a key obstacle to OpenAI's restructuring plan.

Goto did not mention any other companies but acknowledged that OpenAI has many stakeholders. "Our discussions are based on the assumption that the restructuring will proceed. However, there are different stakeholders, and some may interfere with the project, making things not go as smoothly as we hope," Goto said. "But that is beyond our control. We will see what happens."

Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.