OpenAI said that it has signed a non-binding agreement with Microsoft, its largest investor, paving the way for the AI startup to restructure into a for-profit company.

"OpenAI’s planned evolution will see the existing OpenAI nonprofit both control a Public Benefit Corporation (PBC) and share directly in its success," OpenAI said in a blogpost.

The two companies are actively working to finalize contractual terms in a definitive agreement, it added.

Bret Taylor, board chairman, OpenAI, in the blogpost, explained that under the nonbinding agreement OpenAI’s nonprofit would continue to exist and retain control over the startup’s operations. OpenAI’s nonprofit would get a stake in the company’s PBC, worth more than $100 billion, added Taylor.

OpenAI started as a non-profit organization and is controlled by a nonprofit board. Microsoft invested in OpenAI in 2019 but as OpenAI grew at a fast clip and products between the two companies competed with each other there has been friction between them.

Just earlier this month, OpenAI said it is building its AI-powered hiring platform called OpenAI Jobs Platform, which will directly take on Microsoft's LinkedIn.