News
Ahead of AGI, Microsoft and OpenAI Redefine Their Partnership
- By Ammaarah Mohamed
- October 28, 2025
In a recapitalization announced Tuesday, OpenAI has launched a new public benefit corporation (PBC) called OpenAI Group, giving Microsoft a 27 percent ownership stake valued at approximately $135 billion.
PBCs are corporations that are legally required to pursue a social or environmental mission alongside financial goals. In this case, OpenAI Group will remain under the control of the nonprofit OpenAI Foundation, a structure that OpenAI says will ensure its ability to secure vital resources ahead of the anticipated development of artificial general intelligence (AGI).
Microsoft retains "exclusive IP rights and Azure API exclusivity" until OpenAI -- alongside a panel of independent experts -- determines it has achieved AGI. However, under the terms of the recapitalization, Microsoft's exclusivity rights have been extended until 2032, with added guardrails for AGI development.
Additionally, Microsoft’s rights to OpenAI’s confidential research methods -- the proprietary techniques used to develop AI models and systems -- will remain until either 2030 or the achievement of AGI, whichever comes first.
There are other new stipulations. Microsoft can pursue AGI either alone or with partners outside of OpenAI. However, "[i]f Microsoft uses OpenAI’s IP to develop AGI, prior to AGI being declared, the models will be subject to compute thresholds."
Likewise, OpenAI can now develop "some" products with companies other than Microsoft, but API products developed will be exclusive to Azure.
OpenAI has also committed to buying $250 billion in Azure services, though it can also choose to partner with other hyperscale cloud providers; Microsoft will no longer have the "right of refusal."
OpenAI can now let U.S. national security agencies use its tools and services, even if they’re not hosted on Microsoft’s cloud. It also can publicly release certain versions of its AI models, as long as they meet specific safety and performance standards.
"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 said in its announcement.
About the Author
Ammaarah Mohamed ([email protected]) is the editorial assistant of the Converge360 Enterprise Technology group.