Microsoft and OpenAI agree on new partnership structure
Microsoft and OpenAI announced preliminary agreements to revise their collaboration terms, paving the way for OpenAI’s restructuring into a fully commercial company.
The companies signed a non-binding memorandum of understanding (MOU) outlining the core principles of a future agreement. Deal details have not yet been disclosed, but both sides said they are working on a final contract.
For OpenAI, the agreement would allow it to move from its unusual “nonprofit + capped-profit” model to a for-profit structure, opening the door to new investment and IPO preparations. Board chair Bret Taylor said the nonprofit arm would retain control and hold a stake worth more than $100B.
Microsoft invested $1B in OpenAI in 2019 and another $10B in 2023. Under previous terms, the corporation had exclusive access to OpenAI technologies and hosted them on its Azure cloud. However, in 2025 OpenAI broadened its partnerships, signing a $300B contract with Oracle and a cloud deal with Google to meet soaring demand for compute.
One of the contentious points in the old agreement was the clause limiting Microsoft’s access to OpenAI technologies once artificial general intelligence (AGI) is achieved. The new memorandum resolves some of these conflicts: Microsoft retains access to products, while OpenAI gains more freedom to raise capital and expand its partner base.
The agreement must still be cleared by regulators in California and Delaware. Opposition also comes from nonprofits, while Elon Musk filed a lawsuit seeking to block the deal.
Despite the risks, markets reacted positively: Microsoft shares rose 2.4% in after-hours trading.
Microsoft invested $1B in OpenAI in 2019 and another $10B in 2023. Under previous terms, the corporation had exclusive access to OpenAI technologies and hosted them on its Azure cloud. However, in 2025 OpenAI broadened its partnerships, signing a $300B contract with Oracle and a cloud deal with Google to meet soaring demand for compute.
One of the contentious points in the old agreement was the clause limiting Microsoft’s access to OpenAI technologies once artificial general intelligence (AGI) is achieved. The new memorandum resolves some of these conflicts: Microsoft retains access to products, while OpenAI gains more freedom to raise capital and expand its partner base.
The agreement must still be cleared by regulators in California and Delaware. Opposition also comes from nonprofits, while Elon Musk filed a lawsuit seeking to block the deal.
Despite the risks, markets reacted positively: Microsoft shares rose 2.4% in after-hours trading.
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