- Microsoft Corp.
- 28 October 2025 14:34:51
Source: Sharecast
The deal formalised Microsoft’s roughly 27% stake in OpenAI, valued at about $135bn, and sets out a revised framework for cooperation that extends their collaboration while granting both companies greater independence.
OpenAI’s new corporate structure would establish a for-profit entity called OpenAI Group PBC, overseen by a non-profit parent, the OpenAI Foundation, which retains control of the company’s mission and governance.
The foundation would hold equity in the for-profit valued at around $130bn, making it one of the most well-funded philanthropic bodies globally.
Chief executive Sam Altman said the recapitalisation was essential to attract the scale of investment needed to remain competitive in developing frontier AI systems.
Under the updated agreement, Microsoft would remain OpenAI’s exclusive partner for frontier AI models and continue to hold intellectual property and Azure API exclusivity rights until at least 2032, extending the previous 2030 limit.
The accord would also allow Microsoft to pursue artificial general intelligence (AGI) independently or with other partners, while OpenAI gained the freedom to jointly develop certain products with third parties and serve non-API offerings on other cloud providers.
The new structure also introduced an independent expert panel to verify any future declaration of AGI, a development that would trigger changes in IP rights and revenue-sharing terms between the two firms.
OpenAI had additionally contracted to purchase $250bn in Azure services, though Microsoft would no longer have a right of first refusal as its compute provider.
Microsoft said the revised framework “strengthens our partnership and sets the stage for long-term success,” maintaining key exclusivity while enabling each company to innovate autonomously.
OpenAI, meanwhile, said the arrangement provided “a direct path to major resources before AGI arrives,” aligning its non-profit mission with commercial growth.
The agreement followed a turbulent period for OpenAI’s governance since the brief ousting of Altman in late 2023, and came as both companies raced to advance next-generation AI technologies.
At 1032 EDT (1432 GMT), shares in Microsoft Corporation were up 2.54% in New York at $544.99.
Reporting by Josh White for Sharecast.com.
