OpenAI could see its private funding round reduced by up to $10 billion if it doesn’t transition into a for-profit entity by December 31.

The round, originally valued at $40 billion, would drop to $30 billion if the company fails to restructure, according to a source familiar with the situation who requested anonymity.

The Wall Street Journal initially reported the terms of the deal, which would value OpenAI at $300 billion, including the new capital.

SoftBank’s stake in the round would drop from $30 billion to $20 billion, while the contributions from other investors, such as Microsoft, would remain at $10 billion, according to the source.

This provision increases the pressure on OpenAI to transition into a for-profit entity, a move that will require approval from Microsoft and the California Attorney General.

The plan has also faced legal challenges from Elon Musk, a co-founder of OpenAI, which was originally established as a non-profit research lab in 2015.

Investors supporting OpenAI will receive convertible notes, which will convert into traditional equity after the restructuring, according to the source.

A portion of the funding is also expected to support OpenAI’s involvement in Stargate, the joint venture between SoftBank, OpenAI, and Oracle, announced by President Donald Trump in January.