> First off, the ownership will be split across three groups. Microsoft will hold 49%, VCs another 49%, and the OpenAI foundation will control the remaining 2% of shares.
>
> If OpenAI starts making money, the profits are distributed differently across four stages:
>
> - First, early investors (probably Khosla Ventures and Reid Hoffman’s foundation) get their money back with interest.
> - After that Microsoft is entitled to 75% of profits until the $13B of funding is repaid
> - When the initial funding is repaid, Microsoft and the remaining VCs each get 49% of profits. This continues until another $92B and $150B are paid out to Microsoft and the VCs, respectively.
> - Once the aforementioned money is paid to investors, 100% of shares return to the foundation, which regains total control over the company.
ripper2345 t1_j64h9fp wrote
Reply to ⭕ What People Are Missing About Microsoft’s $10B Investment In OpenAI by LesleyFair
Wow. Sweet deal! This is the gold:
> First off, the ownership will be split across three groups. Microsoft will hold 49%, VCs another 49%, and the OpenAI foundation will control the remaining 2% of shares. > > If OpenAI starts making money, the profits are distributed differently across four stages: > > - First, early investors (probably Khosla Ventures and Reid Hoffman’s foundation) get their money back with interest. > - After that Microsoft is entitled to 75% of profits until the $13B of funding is repaid > - When the initial funding is repaid, Microsoft and the remaining VCs each get 49% of profits. This continues until another $92B and $150B are paid out to Microsoft and the VCs, respectively. > - Once the aforementioned money is paid to investors, 100% of shares return to the foundation, which regains total control over the company.