OpenAI must go for-profit by year-end to secure $40 billion SoftBank deal

OpenAI must restructure as a for-profit company by the end of the year to secure the full $40 billion funding round led by SoftBank, according to a source familiar with the matter.

The artificial intelligence startup, currently backed by Microsoft, is in the final stages of raising the capital.

SoftBank could scale back its investment to $20 billion if OpenAI fails to complete its transition within the required timeframe. The deadline marks an accelerated timeline for OpenAI, which initially had a two-year window to restructure following its last round of financing.

The transition to a for-profit entity is seen as critical for OpenAI’s ability to secure long-term capital and continue developing advanced AI models. The company has previously stated that without this shift, it may struggle to attract the necessary investment to sustain its ambitious AI research and development efforts.