Microsoft, OpenAI Restructure Partnership
- By Ammaarah Mohamed
- 11/03/25
Microsoft and OpenAI have announced they are redefining their partnership as part of a major recapitalization effort aimed at preparing for the arrival of artificial general intelligence (AGI). Under the new structure, OpenAI's for-profit business will become a public benefit corporation (PBC) called OpenAI Group, valued at about $500 billion, with Microsoft holding a 27 percent stake worth roughly $135 billion. The reorganization gives the nonprofit OpenAI Foundation greater control over the for-profit entity to ensure continued alignment with its mission to advance safe and beneficial AGI development.
A PBC is a type of company that, by law, must balance profitability with a stated mission to create a positive impact on society or the environment.
The nonprofit arm, OpenAI Foundation, will retain control of the for-profit venture, per OpenAI's announcement. The restructuring is meant to ensure that the nonprofit foundation "has a direct path to major resources before AGI [artificial general intelligence] arrives," OpenAI said.
Microsoft retains "exclusive IP rights and Azure API exclusivity" until OpenAI — alongside a panel of independent experts — determines it has achieved AGI. However, under the terms of the recapitalization, Microsoft's exclusivity rights have been extended until 2032, with added guardrails for AGI development.
Additionally, Microsoft's rights to OpenAI's confidential research methods — the proprietary techniques used to develop AI models and systems — will remain until either 2030 or the achievement of AGI, whichever comes first.
There are other new stipulations. Microsoft can pursue AGI either alone or with partners outside of OpenAI. However, "if Microsoft uses OpenAI's IP to develop AGI, prior to AGI being declared, the models will be subject to compute thresholds."
Likewise, OpenAI can now develop "some" products with companies other than Microsoft, but API products developed will be exclusive to Azure.
OpenAI has also committed to buying $250 billion in Azure services, though it can also choose to partner with other hyperscale cloud providers; Microsoft will no longer have the "right of refusal."
OpenAI can now let U.S. national security agencies use its tools and services, even if they're not hosted on Microsoft's cloud. It also can publicly release certain versions of its AI models, as long as they meet specific safety and performance standards.
"As we step into this next chapter of our partnership, both companies are better positioned than ever to continue building great products that meet real-world needs, and create new opportunity for everyone and every business," Microsoft said.
For more information, go to the Microsoft blog post.
About the Author
Ammaarah Mohamed ([email protected]) is the editorial assistant of the Converge360 Enterprise Technology group.