Microsoft and OpenAI have finalized a new agreement that redefines their long-standing partnership and sets the stage for future collaboration — and separation — as both companies continue to advance artificial intelligence. The deal follows months of negotiations and gives Microsoft a deeper strategic position while allowing OpenAI greater independence as it restructures its business.
Under the new terms, Microsoft will retain its ownership stake in OpenAI and maintain access to its research, while OpenAI will make a major investment in Microsoft’s Azure cloud infrastructure. The arrangement also formalizes OpenAI’s move toward operating fully as a for-profit entity. One of the most notable clauses concerns the development of artificial general intelligence (AGI): if either company achieves AGI — broadly defined as AI with human-level reasoning ability — the partnership will effectively end. Microsoft will retain certain rights to models developed up to that point, but AGI itself will remain outside its control.
The companies have agreed that OpenAI may work with other hardware and software partners, including on AI-powered devices, provided any use of the OpenAI API runs through Microsoft’s Azure platform. This ensures Azure remains central to OpenAI’s commercial activity, even as the firm diversifies its partnerships.
Financially, the deal heavily favors Microsoft. The company will continue to hold a 27 percent equity stake in OpenAI, valued at roughly $130 billion, and will receive 20 percent of OpenAI’s ongoing revenue. OpenAI, meanwhile, has committed to purchasing approximately $250 billion in Azure computing resources over the next several years. These terms secure a long-term revenue stream for Microsoft while reinforcing Azure’s dominance in the enterprise AI market.
For OpenAI, the restructuring offers flexibility to collaborate with other major tech companies and pursue broader commercial opportunities beyond Microsoft’s ecosystem. However, it also signals the company’s growing capital requirements as it scales its infrastructure. OpenAI CEO Sam Altman has suggested ambitions to reach one gigawatt of AI compute capacity per week — a target that could require investments approaching tens of billions of dollars. With an anticipated $500 billion initial public offering reportedly planned for next year, and new business ventures such as integrating commerce into ChatGPT through a partnership with PayPal, OpenAI appears to be preparing for an era of rapid expansion.
While Microsoft’s position is strengthened through this deal, OpenAI’s path forward will depend on balancing independence with the immense costs of AI development. Both companies stand to gain — but with clearly defined limits to their collaboration should artificial general intelligence become a reality.
