Microsoft has announced that it now holds a 27 percent stake in OpenAI, clearing its path to pivot into a “for profit” corporate model. On Tuesday, OpenAI announced it has finalized its restructure giving its nonprofit foundation ultimate control over its commercial, for-profit operations. The Windows-maker said it supports OpenAI’s for-profit arm which is a public benefit corporation called OpenAI Group PBC.
Microsoft now retains roughly 27 percent of the PBC arm, valued at $135 billion, it said in an official statement on Tuesday.
“Microsoft’s IP rights now exclude OpenAI’s consumer hardware. OpenAI can now jointly develop some products with third parties. OpenAI can now provide API access to US government national security customers, regardless of the cloud provider,” the software giant said.
OpenAI was founded as a non-profit AI firm in 2015 by 11 co-founders including its present Sam Altman and Elon Musk among others. In 2019, OpenAI managed to raise a billion dollars from Microsoft — a financial commitment that later expanded to become a multi-year funding deal intended to run until 2030. In exchange Microsoft got access to OpenAI’s advanced AI models and the deal to serve as its cloud provider.
OpenAI’s valuation rose from $157 billion in October 2024 to $300 billion in April 2025 following a funding round led by SoftBank that roped-in $40 billion in investments. Altman started pitching this pivot to a for-profit model seeking funds to support AI innovation through traditional investments and not just donations.
While discussions around OpenAI’s restructure were going on, the AGI clause had emerged as a crucial bone of contention.
One of the most prominent bone of contention before the parties. Under this clause, OpenAI had the right to cut off Microsoft’s access to its intellectual property if it ever developed artificial general intelligence (AGI) – a technology predicted to outperform humans at economically valuable work. Microsoft chief Satya Nadella tried to push for a complete removal of this clause, OpenAI kept backing the clause.
“Once AGI is declared by OpenAI, that declaration will now be verified by an independent expert panel. Microsoft can now independently pursue AGI alone or in partnership with third parties. If Microsoft uses OpenAI’s IP to develop AGI, prior to AGI being declared, the models will be subject to compute thresholds,” Microsoft said.
OpenAI has reiterated that it will continue to serve as Microsoft’s frontier model partner wherein the Windows-maker will have exclusive IP rights and Azure API exclusivity until AGI is achieved.