After UK competition officials said they were preparing to investigate Microsoft’s multibillion-dollar alliance with OpenAI last week, the San Francisco-based start-up quietly made a change to its website. Having previously described the tech giant as a “minority owner” in OpenAI, the wording was changed over the weekend to describe Microsoft as only holding a “minority economic interest”. The distinction may prove crucial as antitrust authorities attempt to shine a light on Silicon Valley’s most-watched — yet least understood — partnership. The looming investigation comes after the artificial intelligence start-up was engulfed by chaos last month. Chief executive Sam Altman was fired by OpenAI’s board, only to be reinstated days later after pressure from the AI company’s employees and investors, including Microsoft chief Satya Nadella. However, neither Microsoft nor OpenAI’s other backers — which include Thrive Capital and Sequoia Capital — own any conventional equity shareholding in the company. Instead, they are entitled to receive a share of its profits from a specific subsidiary of OpenAI, up to a certain limit. Investors who may choose to participate in a continuing $1bn tender offer that would value OpenAI at $86bn, will get the same deal, according to people familiar with the matter. The peculiar structure of these deals shows how the altruistic origins of Silicon Valley’s most prominent start-up are now colliding with the huge commercial promise of AI. OpenAI was founded in 2015 as a not-for-profit organisation, which now owns the for-profit subsidiaries created in 2019 to facilitate Microsoft’s investment. But, at least until recently, many of the details of its structure have been obscure to outsiders. People familiar with the deal say Microsoft has in total committed up to $13bn to OpenAI, including a $10bn expansion announced in January this year. But until the past week, it was never clear about what kind of return its own shareholders might expect from the investment. The graphic detailing OpenAI’s complex ownership structure on its website was amended a few days ago without renewing the web page’s timestamp, which indicates that the last update was made in June. OpenAI confirmed the language was altered to clarify Microsoft’s position and did not reflect any change to their underlying agreement.

Full commentary : How Microsoft’s multibillion-dollar alliance with OpenAI really works.