OpenAI Transitions to Public Benefit Corporation as Microsoft–OpenAI Partnership Enters New Phase

OpenAI Transitions to Public Benefit Corporation as Microsoft–OpenAI Partnership Enters New Phase
Microsoft and OpenAI have entered a new phase of their long-standing partnership, signing a definitive agreement that deepens their collaboration and redefines their relationship in the era of advanced artificial intelligence. The deal follows OpenAI’s decision to restructure as a public benefit corporation (PBC), a move backed by Microsoft, which now holds an investment in OpenAI Group PBC valued at approximately USD 135 billion, representing about 27 percent on an as-converted diluted basis. Before OpenAI’s recent funding rounds, Microsoft’s stake stood at 32.5 percent on an as-converted basis in the OpenAI for-profit, according to a joint announcement by Microsoft and OpenAI on October 28, 2025.

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Core Partnership Pillars Remain Intact

The agreement preserves the core pillars that have driven the partnership since its inception in 2019—Microsoft remains OpenAI’s exclusive partner for frontier AI models and continues to hold exclusive rights for Azure API services until the achievement of Artificial General Intelligence (AGI). However, the new terms introduce greater flexibility for both organizations while ensuring continued cooperation and alignment on safety and innovation.

New Flexibility and Independent Oversight

Under the updated framework, any declaration of AGI by OpenAI will now be verified by an independent expert panel, adding external oversight to a milestone that could reshape the industry. Microsoft’s intellectual property rights for both models and products have been extended through 2032, covering post-AGI systems under agreed safety guardrails. Rights to OpenAI’s confidential research methods will remain in place until either AGI verification or 2030, while Microsoft retains non-research IP such as deployment and infrastructure-related technologies. OpenAI’s consumer hardware is explicitly excluded from Microsoft’s IP rights.