# Microsoft–OpenAI partnership and restructuring
The Microsoft–OpenAI partnership is a compute-and-equity arrangement under which Microsoft has invested about $13 billion in OpenAI since 2019 in exchange for equity, intellectual-property rights, and Azure revenue, and which was renegotiated in October 2025 when OpenAI converted its for-profit arm into a public benefit corporation and again in April 2026 in a further "next phase" revision.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) • [2](https://openai.com/index/next-phase-of-microsoft-partnership/) • [3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html) Its 2025 restructuring replaced OpenAI's unusual capped-profit structure with a form that let OpenAI raise capital at a $500 billion valuation while keeping the nonprofit in control.[4](https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/)
## What the deal is
Microsoft's arrangement with OpenAI has two components. First, a funding relationship: cash from Microsoft in exchange for a stake in OpenAI's for-profit operations, totaling $13 billion invested since 2019.[3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html) Second, a commercial relationship: OpenAI builds and serves its models on Microsoft's Azure cloud, Microsoft gets rights to OpenAI's models and products for its own offerings, and OpenAI pays Microsoft a share of its revenue.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) • [3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html)
Until October 2025 this operated inside OpenAI's capped-profit structure, under which Microsoft was once entitled to 49 percent of OpenAI's future profits through its $13 billion investment.[4](https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/) On October 28, 2025, OpenAI converted its for-profit arm into the OpenAI Group Public Benefit Corporation (PBC), which remains controlled by the nonprofit foundation.[5](https://fortune.com/2025/10/28/openai-for-profit-restructuring-microsoft-stake/) The conversion followed more than a year of negotiation and required the non-objection of two state regulators, the Delaware and California attorneys general.[6](https://apnews.com/article/openai-chatgpt-nonprofit-microsoft-c661df3242766d6b0ddbab401ad1fd84)
## Key facts
| Fact | Value |
|---|---|
| Microsoft total investment since 2019 | $13 billion[3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html) |
| Microsoft stake after October 2025 | ~27% of OpenAI Group PBC, valued ~$135 billion (vendor-reported)[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) |
| Stake before the 2025 funding rounds | 32.5% on an as-converted basis (vendor-reported)[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) |
| OpenAI Azure commitment | Incremental $250 billion of Azure services[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) |
| Microsoft IP rights | Through 2032, non-exclusive from April 2026, including post-AGI models with safety guardrails[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) • [2](https://openai.com/index/next-phase-of-microsoft-partnership/) |
| OpenAI-to-Microsoft revenue share | Through 2030, same percentage, subject to an undisclosed total cap[2](https://openai.com/index/next-phase-of-microsoft-partnership/) • [3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html) |
| OpenAI valuation during talks | Rose from $100 billion to $500 billion[4](https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/) |
## Timeline: from $1 billion to the 2025–2026 renegotiations
The evidence base reports the cumulative total of Microsoft's investment as $13 billion since 2019; the individual 2019 and 2021 tranches and their specific terms are not covered by the sources here.[3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html)
October 28, 2025 was the pivotal date: OpenAI completed its for-profit restructuring, creating the OpenAI Group Public Benefit Corporation under nonprofit control, and signed a new agreement with Microsoft covering equity, IP, compute, and revenue share.[5](https://fortune.com/2025/10/28/openai-for-profit-restructuring-microsoft-stake/) • [6](https://apnews.com/article/openai-chatgpt-nonprofit-microsoft-c661df3242766d6b0ddbab401ad1fd84)
In April 2026 the two companies announced a "next phase" of the partnership. Microsoft's license to OpenAI IP for models and products runs through 2032 but became non-exclusive, and Microsoft stopped paying a revenue share to OpenAI.[2](https://openai.com/index/next-phase-of-microsoft-partnership/) TechCrunch reported that this arrangement resolved legal peril connected to OpenAI's $50 billion Amazon deal and gave the partnership a definitive calendar timeline rather than one pegged to an AGI milestone.[7](https://techcrunch.com/2026/04/27/openai-ends-microsoft-legal-peril-over-its-50b-amazon-deal/)
## Terms and numbers: equity, IP, compute and revenue share
**Equity.** Before the impact of OpenAI's recent funding rounds, Microsoft held 32.5 percent of the for-profit on an as-converted basis, according to OpenAI's announcement.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) After the recapitalization, Microsoft holds an investment in OpenAI Group PBC valued at approximately $135 billion, roughly 27 percent on an as-converted diluted basis, a figure OpenAI reported and journalism echoed.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) • [8](https://www.theverge.com/news/807875/openai-microsoft-for-profit-agi) • [9](https://www.businessinsider.com/openai-completes-restructuring-for-profit-signs-new-microsoft-agreement-2025-10)
**Intellectual property.** Microsoft's IP rights to OpenAI models and products run through 2032 and now include post-AGI models with appropriate safety guardrails; research IP rights last until AGI verification or 2030, whichever comes first.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) From April 2026 the 2032 license is non-exclusive.[2](https://openai.com/index/next-phase-of-microsoft-partnership/)
**Compute.** OpenAI contracted to purchase an incremental $250 billion of Azure services, and Microsoft gave up its right of first refusal as OpenAI's compute provider.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) Under the April 2026 terms, [OpenAI products](https://www.edgepedia.org/products-and-applications-of-openai) ship first on Azure unless Microsoft cannot or chooses not to support the necessary capabilities, while OpenAI can serve all products on any cloud.[2](https://openai.com/index/next-phase-of-microsoft-partnership/) The sources do not disclose the pricing or margins of the Azure arrangement.
**Revenue share.** OpenAI pays Microsoft a share of revenue through 2030, at the same percentage as before but subject to a total cap, independent of OpenAI's technology progress, according to OpenAI.[2](https://openai.com/index/next-phase-of-microsoft-partnership/) Reporting puts that share at a guaranteed 20 percent of OpenAI's revenue until 2030, with the cap undisclosed.[3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html) The reverse payment, from Microsoft to OpenAI, ended with the April 2026 revision; [The Verge](https://www.edgepedia.org/the-verge) reported a conditional reading, under which Microsoft avoids the payment if its search and news advertising revenue grows 15 percent year over year.[2](https://openai.com/index/next-phase-of-microsoft-partnership/) • [10](https://www.theverge.com/tech/921210/microsoft-openai-partnership-divorce-notepad)
The October 2025 agreement also loosened exclusivity in OpenAI's favor: OpenAI can jointly develop some products with third parties, API products remain exclusive to Azure while non-API products can be served on any cloud, OpenAI may release open-weight models meeting capability criteria, and it can serve US government national security customers on any cloud.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/)
## The AGI clause and the regulators
The renegotiation took more than a year, and its hardest sticking point was the AGI clause. The old terms contained a rider that would have allowed OpenAI to stop paying Microsoft if it achieved artificial general intelligence, a definition OpenAI itself controlled; the new terms removed that rider.[3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html) In its place, once OpenAI declares AGI, the declaration will be verified by an independent expert panel, and the OpenAI-to-Microsoft revenue share continues until that verification, paid over a longer period.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/)
The deal also had to satisfy OpenAI's for-profit arm, its nonprofit parent, Microsoft, and the attorneys general of California and Delaware, who oversee the charitable assets involved.[4](https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/) Delaware Attorney General Kathy Jennings and California Attorney General Rob Bonta announced in separate statements that they would not object to the restructuring, ending more than a year of negotiations over OpenAI's governance.[6](https://apnews.com/article/openai-chatgpt-nonprofit-microsoft-c661df3242766d6b0ddbab401ad1fd84) The nonprofit emerged with roughly a third of OpenAI, plus warrants for additional shares tied to "extraordinary outcomes" such as achieving AGI, while keeping control over board appointments for the for-profit.[4](https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/)
## By the numbers: what each side got
The restructuring repriced both sides' positions. Microsoft moved from an entitlement to 49 percent of OpenAI's future profits under the capped-profit model to about 27 percent of equity and roughly 20 percent of revenue.[4](https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/) That dilution came with a fivefold revaluation: between the start of the restructuring discussions and the October 2025 announcement, OpenAI's valuation rose from $100 billion to $500 billion.[4](https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/) The nonprofit kept roughly one-third of the company plus AGI-linked warrants and board control.[4](https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/) In exchange for accepting a smaller slice, Microsoft secured a fixed 2032 horizon on IP, a $250 billion Azure commitment, and freedom to pursue AGI on its own.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/)
## Consequences and recent frictions
**End of exclusivity.** Microsoft no longer has a right of first refusal as OpenAI's compute provider, and OpenAI can run its products on other clouds.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/) • [7](https://techcrunch.com/2026/04/27/openai-ends-microsoft-legal-peril-over-its-50b-amazon-deal/) The April 2026 arrangement also resolved legal peril connected to OpenAI's $50 billion Amazon deal, according to [TechCrunch](https://www.edgepedia.org/techcrunch).[7](https://techcrunch.com/2026/04/27/openai-ends-microsoft-legal-peril-over-its-50b-amazon-deal/)
**Competing models.** Microsoft has been reducing its reliance on OpenAI by developing its own models and rolling out models from [Anthropic](https://www.edgepedia.org/anthropic) in products including 365 Copilot for enterprises.[3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html) The renegotiation helps OpenAI compete with Anthropic ahead of planned IPOs, Reuters reported.[3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html) Microsoft can now independently pursue AGI alone or in partnership with third parties.[1](https://openai.com/index/next-chapter-of-microsoft-openai-partnership/)
**Antitrust.** Ending the exclusivity pact may help Microsoft fight antitrust scrutiny in the UK, the US, and Europe over whether its OpenAI tie-up gives it an unfair advantage in cloud and enterprise AI markets.[3](https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html)
## References
1. The next chapter of the Microsoft–OpenAI partnership | OpenAI. https://openai.com/index/next-chapter-of-microsoft-openai-partnership/
2. The next phase of the Microsoft OpenAI partnership | OpenAI. https://openai.com/index/next-phase-of-microsoft-partnership/
3. Microsoft, OpenAI change terms of deal so startup can court Amazon and others (Reuters via Yahoo Finance). https://finance.yahoo.com/sectors/technology/articles/microsoft-end-exclusive-license-openais-131046378.html
4. Artificial Intelligencer: Inside the $500 billion deal that freed OpenAI's ambition | Reuters. https://www.reuters.com/technology/artificial-intelligence/artificial-intelligencer-inside-500-billion-deal-that-freed-openais-ambition-2025-10-29/
5. OpenAI completes for-profit restructuring and grants Microsoft a 27% stake | Fortune. https://fortune.com/2025/10/28/openai-for-profit-restructuring-microsoft-stake/
6. OpenAI reorganizes its structure to raise money and profit | AP News. https://apnews.com/article/openai-chatgpt-nonprofit-microsoft-c661df3242766d6b0ddbab401ad1fd84
7. OpenAI ends Microsoft legal peril over its $50B Amazon deal | TechCrunch. https://techcrunch.com/2026/04/27/openai-ends-microsoft-legal-peril-over-its-50b-amazon-deal/
8. OpenAI completed its for-profit restructuring — and struck a new deal with Microsoft | The Verge. https://www.theverge.com/news/807875/openai-microsoft-for-profit-agi
9. OpenAI Restructures, Gets More Freedom in New Microsoft Deal | Business Insider. https://www.businessinsider.com/openai-completes-restructuring-for-profit-signs-new-microsoft-agreement-2025-10
10. Here's how the new Microsoft and OpenAI deal breaks down | The Verge. https://www.theverge.com/tech/921210/microsoft-openai-partnership-divorce-notepad
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*Topic: Encyclopedia › Technology and the built world › Computing and digital systems › Modern AI: foundation models, generative AI, and the AI industry › AI companies, people, and products › AI funding, deals, and markets › AI acquisitions, partnerships, and compute deals*
*Initially written Sep 17, 2026 · Edited: Oct 11, 2026; Oct 15, 2026*
*Copyright 2026 EdgeChat AI, a subsidiary of Biostate AI.*
License: Edgepedia Community License 1.0, https://www.edgepedia.org/edgepedia/license