Microsoft and OpenAI have signed a non-binding agreement to restructure their long-standing partnership, paving the way for OpenAI to transition into a for-profit company.
Both companies confirmed the deal on Thursday, saying details of the new commercial arrangement were still being finalized.
The move marks a turning point in one of the tech industry’s most high-profile partnerships, as OpenAI seeks to raise capital under a more conventional corporate structure, pursue new cloud partnerships, and potentially go public to support its artificial intelligence ambitions.
Microsoft first invested $1 billion in OpenAI in 2019 and followed with a $10 billion injection in early 2023, securing exclusive rights to sell OpenAI’s tools via its Azure cloud platform. But OpenAI has since diversified its partnerships, including deals with Oracle and Google, as it ramps up its data center project “Stargate.”
Under current terms, OpenAI’s nonprofit arm is expected to receive over $100 billion — around 20% of the $500 billion valuation the company is seeking in private markets, according to board chairman Bret Taylor.
The restructuring plan, however, faces regulatory scrutiny. Attorneys general in California and Delaware must approve the changes before they take effect.
Analysts say the new arrangement will allow OpenAI to expand its reach while Microsoft maintains continued access to its cutting-edge models, even as it develops rival AI systems.
