Microsoft and OpenAI have signed a new definitive agreement, marking the next chapter in their long-standing collaboration and strengthening one of the technology industry’s most influential partnerships.
Since first joining forces in 2019, the two companies have worked together to advance artificial intelligence responsibly and make its benefits widely accessible. What started as Microsoft’s investment in OpenAI’s research operations has now evolved into a broader strategic alliance focused on innovation, transparency, and long-term growth.
Under the new structure, Microsoft supports OpenAI’s transition into a public benefit corporation (PBC) and recapitalization. Following this change, Microsoft holds an investment in OpenAI Group PBC valued at approximately $135 billion, representing about 27% ownership on an as-converted diluted basis, inclusive of all owners — employees, investors, and the OpenAI Foundation. Prior to the recapitalization and excluding OpenAI’s most recent funding rounds, Microsoft’s stake in the for-profit entity stood at 32.5 percent.
The renewed agreement maintains the central elements that have driven the partnership’s success: OpenAI remains Microsoft’s frontier model partner, and Microsoft continues to hold exclusive intellectual property (IP) rights and Azure API exclusivity until Artificial General Intelligence (AGI) is achieved.
Several key provisions have evolved in this new agreement. Once OpenAI declares AGI, that declaration will now be verified by an independent expert panel. Microsoft’s IP rights for models and products are extended through 2032 and now include post-AGI models, with appropriate safety guardrails.
Microsoft’s research IP rights—covering confidential development methods—will remain in effect until AGI is verified or through 2030, whichever comes first. These rights exclude model architecture, weights, inference, and fine-tuning code, and data center technologies, which Microsoft will continue to own. Microsoft’s IP rights now also exclude OpenAI’s consumer hardware.
OpenAI can now co-develop products with third parties. Any API products developed under these collaborations will remain exclusive to Azure, while non-API products may be deployed on other cloud providers. Microsoft, meanwhile, can pursue AGI independently or with different partners.
If Microsoft uses OpenAI’s IP to develop AGI before AGI declaration, that work will be subject to compute thresholds that exceed the size of the current leading models. The existing revenue-sharing agreement between the two companies will continue until AGI is verified, with payments now distributed over a longer period.
As part of the new arrangement, OpenAI has committed to purchase an additional $250 billion of Azure services, while Microsoft’s right of first refusal as OpenAI’s compute provider has been removed. OpenAI may now also provide API access to U.S. government national security customers regardless of their cloud provider, and it is now permitted to release open-weight models that meet specific capability criteria.
Both organizations said the updated structure sets a stronger foundation for sustained collaboration and responsible progress in artificial intelligence.
KEY QUOTES:
“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 Statement
