On October 28, 2025 Microsoft and OpenAI announced the next chapter of their partnership, completing OpenAI’s recapitalization. OpenAI’s for-profit arm became a public benefit corporation, with the OpenAI nonprofit retaining control. Microsoft said its stake in the new entity was valued at approximately $135 billion, “representing roughly 27 percent on an as-converted diluted basis,” down from the 32.5 percent it had held before recent OpenAI funding rounds.
The restructured agreement changed several long-standing terms. Microsoft can now “independently pursue AGI alone or in partnership with third parties,” and OpenAI “will no longer have a right of first refusal to be OpenAI’s compute provider.” OpenAI committed to purchasing an incremental $250 billion of Azure services. Microsoft’s intellectual-property rights to OpenAI’s models and products were extended through 2032 and now include models developed after AGI, with safety guardrails. A new clause specifies that once OpenAI declares it has reached AGI, that declaration “will now be verified by an independent expert panel.”
OpenAI also gained new freedoms: it can release open-weight models meeting certain capability criteria and provide API access to US national-security customers regardless of cloud provider.
Why business readers should care: this is one of the most consequential corporate restructurings in AI, turning the OpenAI-Microsoft relationship from a near-exclusive cloud-and-IP arrangement into a looser one and converting a research nonprofit’s commercial arm into a benefit corporation under continued nonprofit control - while attaching a formal, panel-verified definition of the AGI milestone to the contract.