Microsoft and OpenAI signed a new agreement that reshapes their partnership. According to Microsoft’s official blog, the deal supports OpenAI’s move to a public benefit corporation structure. Microsoft now holds an investment valued at about $135 billion in the new OpenAI Group PBC. This represents roughly 27 percent ownership on an as-converted diluted basis.
Key Changes in the Partnership
The updated agreement keeps OpenAI as Microsoft’s frontier model partner. Microsoft retains exclusive IP rights and Azure API access until Artificial General Intelligence (AGI) is reached. When OpenAI declares AGI, an independent expert panel will verify that declaration.
Microsoft’s IP rights now extend through 2032. These rights include models developed after AGI is reached, with safety measures in place. The company also keeps IP rights for research methods until AGI verification or 2030, whichever comes first. Microsoft can now pursue AGI development independently or with other partners.
Commercial and Technical Terms
OpenAI can jointly develop some products with third parties under the new terms. API products built with partners will remain exclusive to Azure. Non-API products may run on any cloud provider. OpenAI contracted to purchase $250 billion in Azure services. Microsoft no longer has first refusal rights to provide OpenAI’s computing infrastructure.
New Freedoms for Both Companies
The agreement gives both companies more independence. OpenAI can now release open weight models that meet specific capability standards. The company can also provide API access to US government national security customers on any cloud platform. Microsoft’s IP rights exclude OpenAI’s consumer hardware products.
The revenue share arrangement continues until AGI verification. Payments will be spread over a longer time period. Before Microsoft’s stake adjustment, the company held 32.5 percent of the OpenAI for-profit entity on an as-converted basis. The partnership began in 2019 as an investment in a research organization.
