San Francisco, September 12 — In a pivotal development for the global artificial intelligence landscape, Microsoft and OpenAI have signed a non-binding agreement that sets the stage for OpenAI’s transition from a nonprofit entity to a for-profit public-benefit corporation. The move marks a significant shift in one of the tech industry’s most influential partnerships, aimed at unlocking new capital and expanding AI capabilities.
The memorandum of understanding outlines a framework that would allow OpenAI to restructure its governance and financial model, enabling it to raise funds under conventional corporate terms and potentially pursue a public listing. While the final commercial terms are still under negotiation, both companies confirmed they are working toward a definitive agreement.
Microsoft, which has invested over $11 billion in OpenAI since 2019, previously held exclusive rights to market OpenAI’s software tools via its Azure cloud platform. Under the new arrangement, OpenAI will have greater flexibility to collaborate with other cloud providers, including Oracle and Google, and to scale its infrastructure through its own data center initiative, Project Stargate.
OpenAI’s nonprofit arm is expected to retain a 20% equity stake in the restructured entity, valued at over $100 billion, based on a projected $500 billion valuation. This structure is designed to preserve OpenAI’s public-interest mission while allowing its operating arm to pursue aggressive growth and innovation.
The restructuring plan faces regulatory scrutiny, with attorneys general in California and Delaware reviewing the proposal. Legal challenges and safety concerns raised by advocacy groups and industry competitors may influence the timeline and terms of the transition.
Microsoft, meanwhile, is seeking to maintain long-term access to OpenAI’s technology, even in scenarios where OpenAI’s models reach human-level intelligence—a milestone that could otherwise trigger termination clauses in their existing agreement.
As OpenAI’s revenue climbs into the billions, the restructuring is seen as essential to securing the computing power and capital needed to meet surging demand for advanced AI tools. The deal signals a new chapter in the evolution of AI governance, commercialization, and strategic partnerships.
