OpenAI Announces New Structure Along With Microsoft - DTNS 5103

Mastodon is getting quote posts after listening to user feedback requests, and Sony's new midrange Xperia 10 VII is taking a page out of the Google Pixel design book with a pill-shaped camera bar.

Starring Jason Howell, Huyen Tue Dao, and Tom Merritt.

JASON: This is the Daily Tech News for Friday, September 12, 2025. We tell you what you need to know, follow up on the context of those stories and help each other understand.

HUYEN: Today, OpenAI solidifies its plan to restructure the company, and Microsoft is along for the ride.

I’m Jason Howell,

I’m Huyen Tue Dao.

JASON: Let’s start with what you need to know with the big story.

BIG STORY

OpenAI Realignment to Give Nonprofit Over $100 Billion Stake - Bloomberg
OpenAI and Microsoft Announce New Deal as the Startup Plans For-Profit Restructuration
A joint statement from OpenAI and Microsoft | OpenAI
OpenAI says nonprofit parent to own stake in company over $100 billion
OpenAI and Microsoft reach tentative deal to revise partnership
OpenAI Takes Big Steps Toward Its Long-Planned Reorganization
Microsoft and OpenAI have a new deal that could clear the way for an IPO

JASON: OpenAI and Microsoft have reached a deal to let OpenAI restructure. Why does Microsoft have a say in this? Why does OpenAI want to restructure? Tom Merritt recorded a bit of explanation of the backstory to help us understand.

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TOM [PRE-RECORD]: OpenAI's corporate structure is a bit confusing if you don't follow it closely. OpenAI is a non-profit organization founded in 2015 that, in 2019, created a "capped-profit" subsidiary known as OpenAI Global LLC. The idea is similar to how Mozilla is a non-profit with a for-profit subsidiary that operates Firefox and other products. It lets OpenAI take investments that pay a return, instead of just grants, and then use that extra money to pay higher salaries to attract more talent.

But the cap on profits means any investor may only receive 100 times its investment. Which means not everybody who might otherwise want to invest will do it. Microsoft took the opportunity and invested more than $13 billion in OpenAI, in exchange for getting not only the capped profits but also preferred access to its newest models and 49% ownership in the for-profit LLC. Reportedly, there is a clause in that agreement that cuts off Microsoft's preferred access if OpenAI develops some definition of superintelligence.

While the capped profit structure helped increase investment, OpenAI needs more cash than it provides if it wants to keep growing. So, OpenAI would like to restructure to get rid of the cap on profits to investors, which would not only attract a wider number of them but also make it easier to list public stock. The current plan is to create a Public Benefit corporation. That's a type of corporation that has in its charter that it is committed to some kind of public benefit as a priority beyond just profits for shareholders. But it is still for profit and does not cap investor returns. Examples include Patagonia, Warby Parker, Kickstarter, and King Arthur Baking Company, among many others. To do all that, OpenAI needs Microsoft to agree to restructure its agreement.

And that brings us to the news from Thursday. Back to you, Jason and Huyen.

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JASON: Thursday, OpenAI and Microsoft announced they have signed a nonbinding memorandum of understanding for a deal to restructure.

OpenAI's nonprofit parent company would remain, and would have control over the subsidiary as well as more than $100 billion stake in the public benefit company, which is estimated to end up being at least 20%.

There are no details on what they agreed on, but one can imagine Microsoft gets continued preferred access, superintelligence or not, and OpenAI gets the freedom to use other cloud providers than Azure.

After this deal is finalized, OpenAI will need to get regulatory approval and end a court case against the restructuring brought by Elon Musk.

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JASON: There’s more we need to know today, let’s get to the briefs.

BRIEFS

Apple delays release of iPhone Air in China due to pending approval of eSIM
Apple Watch hypertension alerts feature receives FDA clearance
Phew, Apple’s polishing cloth is iPhone 17-compatible after all

HUYEN: Let’s round up a few Apple stories related to the hardware announcements earlier this week. Apple has pushed back the launch of the iPhone Air in China as government approval is sought for the embedded SIM in the device. China's three major carriers have all announced eSIM support, but regulatory approval is still needed before the phone can be sold in the country. All other iPhone 17s will be sold in the country with no delay.

Apple's new hypertension notification feature, announced with the Apple Watch Series 11 and Ultra 3, just received FDA clearance in the US. This paves the way for its official launch next week in over 150 countries and regions worldwide.

Finally, if you were wondering why Apple's polishing cloth didn't list the iPhone 17 series in its Compatibility box on the Apple product page, worry no more. The fabric cloth is now fully compatible.

Microsoft dodges EU fine by unbundling Teams from Office

JASON: Microsoft avoided an EU fine by agreeing to fully separate its Teams app from Office 365 packages for at least the next seven years. This resolves a European antitrust investigation that stemmed from a 2020 complaint from Slack about anti-competitive bundling in the business collaboration software market. Microsoft worked closely with the EU to negotiate these changes, like unbundling Teams and improving interoperability, which ultimately satisfied regulators and allowed Microsoft to avoid formal penalties. The EU maintains its authority to impose fines if needed, but also stated that this decision serves as an example of resolving issues through negotiation instead of penalties.

Mastodon is bringing quote posts to the fediverse

HUYEN: Mastodon is launching quote posts next week, letting users add comments to others' posts using a new quote option that's accessible with the repost button. Mastodon had originally chosen not to offer this feature due to concerns around harassment, but has used feedback from users to change its course. Users can control who may quote them and can also disable quoting by post or remove their own content from someone else's quote. The new feature will appear within the user preference setting in the 4.5 update.

Albania appoints AI bot as minister to tackle corruption

JASON: Albania has appointed an AI-powered bot named "Diella" as its new minister for public procurement. The goal of enlisting an AI bot for the role is to eliminate corruption from government contracts. Prime Minister Edi Rama said the bot is impervious to bribes or intimidation and will help make Albania "a country where public tenders are 100% free of corruption." This is not Diella's first task in the government, having launched earlier this year as a virtual assistant on the state platform, involved with helping citizens access official documents.

Sony’s new Xperia phone jumps on the camera bar bandwagon

HUYEN: Sony launched the Xperia 10 VII, a midrange Android smartphone with a camera bar design that is somewhat reminiscent of the Google Pixel and the latest Apple iPhone 17s. It's a stark change from previous Xperia phones that had the camera offset to one side. It features a fancy turquoise color option along with the usual white and black alternatives, some chunky and asymmetrical bezels, a boxier 19.5:9 aspect ratio, and a side mounted camera shutter button. Otherwise, a pretty standard midrange device on sale September 19 in the UK and Europe for around 449 Euros, 399 British pounds sterling.

‘Super Mario Bros. 2’ Officially Titled ‘Super Mario Galaxy Movie’

JASON: A teaser of the upcoming sequel to the Super Mario Bros. Movie was shown during Nintendo Direct. Officially titled "Super Mario Galaxy Movie", it is set to debut in theaters on April 3, 2026, and the film's original cast will return for the follow-up. The first movie is one of the top animated films ever made, with $1.36 billion grossed to date.

PROMO

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HELPING EACH OTHER UNDERSTAND

JASON: We end every episode of DTNS with some shared wisdom. AnonJr posted on our Patreon about the news that Microsoft will no longer charge a fee for listing in the Microsoft Store, but instead just verify ID.

HUYEN:
AnonJr writes:

No fee is nice in one sense, as that's one less barrier to entry for real developers. Not so nice as that's one less barrier to entry for junk trying to grab a buck from the unaware or inattentive.

The trick seems to be in finding the right sort of barriers to junk that doesn't keep out genuine developers.

Likewise the cut (or vig depending on your perspective) for handling transactions certainly feels onerous for the devs. But the servers and bandwidth for the app stores still cost money. Should the stores be a loss-leader? Or should there be some remuneration for providing a place that makes finding a given app easier and updating said app easier?

JASON: What are you thinking about? Got some insight into a story? Share it with us feedback@dailytechnewsshow.com

JASON: Thanks to AnonJr for contributing to today’s show. And thank YOU for being along for Daily Tech News Show. You can keep us in business by becoming a patron, atPatreon.com/dtns