Microsoft and OpenAI Forge New Partnership Phase with Major Equity Shift

Microsoft and OpenAI have announced a significant development in their collaboration by signing a non-binding memorandum of understanding aimed at defining the “next phase” of their partnership. While the specific terms of the agreement remain under discussion, it is expected to address how both companies will share technology and the resulting revenue.
According to a report from The New York Times, the new deal modifies an existing clause that previously restricted Microsoft from accessing OpenAI’s most advanced technologies if the organization determines it has achieved human-like artificial general intelligence (AGI). This adjustment may open new avenues for Microsoft to leverage OpenAI’s innovations in the rapidly evolving artificial intelligence landscape.
Equity Stake and Structural Changes
In addition to the partnership agreement, OpenAI is reportedly granting an equity stake valued at a minimum of $100 billion to its nonprofit arm. This nonprofit entity is responsible for overseeing and controlling OpenAI’s operations. The restructuring is seen as a strategic move that could facilitate OpenAI’s transition into a public benefit corporation, which aims to balance profit-making with societal benefits.
The potential for an initial public offering (IPO) has been a topic of speculation, especially since OpenAI disclosed plans to evolve its corporate structure last year. Following the holiday season in 2024, the organization confirmed its intent to become a public benefit corporation while offering ordinary shares of stock. As OpenAI stated at the time, “It will enable us to raise the necessary capital with conventional terms like others in this space.”
Despite these transformative plans, OpenAI made it clear in May that it would retain control of its for-profit arm under the governance of its nonprofit board. “OpenAI was founded as a nonprofit and is today overseen and controlled by that nonprofit. Going forward, it will continue to be overseen and controlled by that nonprofit,” the organization affirmed.
Microsoft’s Financial Commitment
Microsoft has invested over $13 billion in OpenAI, positioning itself to receive 49 percent of the AI firm’s future profits. This financial commitment underscores the tech giant’s belief in the potential of artificial intelligence and its desire to remain at the forefront of AI development.
The ongoing collaboration between Microsoft and OpenAI illustrates a significant shift in how technology companies might structure their partnerships and governance in the fast-paced AI sector. As both entities work to finalize the details of their agreement, the implications for the broader technology landscape will be closely watched by industry analysts and investors alike.