Microsoft Loosens Grip on OpenAI, Keeps $135 Billion Stake

TLDRs;

• Microsoft ends capital limits on OpenAI, enabling external fundraising while keeping a 27% stake worth $135 billion.
• OpenAI must spend $250 billion on Azure cloud services despite gaining partial independence in its operations.
• Microsoft retains rights to OpenAI’s IP through 2032, including AGI-era models under third-party oversight.
• OpenAI’s 17-gigawatt U.S. infrastructure buildout features clean energy and nuclear partnerships with Nvidia, Oracle, and SoftBank.

Microsoft and OpenAI have finalized a groundbreaking restructuring agreement that reshapes one of the most consequential partnerships in artificial intelligence.

The deal lifts restrictions on OpenAI’s ability to raise external capital, freeing the ChatGPT maker to attract new investors or even explore a public listing in the future.

This shift marks a significant departure from the original 2019 agreement that tied OpenAI’s fundraising activities closely to Microsoft’s oversight. Under the new arrangement, Microsoft relinquishes its exclusive rights to provide cloud computing services for OpenAI. However, it retains a robust 27% equity stake, currently valued at around $135 billion, and will continue to receive roughly 20% of OpenAI’s revenue for several years, according to people familiar with the matter.

Microsoft’s total investment in OpenAI now stands at $13.8 billion, making it one of the most valuable strategic partnerships in the tech industry’s history.

OpenAI Gains Freedom With Conditions

While the new agreement loosens some of Microsoft’s control, it also cements OpenAI’s long-term reliance on Microsoft’s cloud infrastructure. OpenAI must spend a staggering $250 billion on Azure services, ensuring that the majority of its AI workloads, particularly its API products, remain tied to Microsoft’s ecosystem.

However, the company can now develop non-API products using non-Microsoft cloud platforms. This provides some breathing room for OpenAI to diversify its operations and explore partnerships with other vendors like Oracle, SoftBank, and Nvidia, which have been courting the company’s infrastructure buildout plans.

Still, the Azure commitment underscores that “freedom” comes at a price. As OpenAI CEO Sam Altman has previously emphasized, access to massive computing resources is the lifeblood of advancing AI research. In that sense, Microsoft’s role remains foundational to OpenAI’s ambitions, even as the governance structure evolves.

Microsoft Retains Deep IP Access

The deal also clarifies Microsoft’s rights to OpenAI’s intellectual property and future models. The tech giant will maintain access to OpenAI’s technologies, including models developed after the achievement of Artificial General Intelligence (AGI), until 2032.

However, this access is subject to oversight by an independent expert panel that will review AGI-related claims. Once AGI is officially recognized or by 2030, Microsoft’s rights to OpenAI’s research will expire, along with revenue-sharing provisions.

In essence, Microsoft’s new role transforms it from an exclusive cloud host into a strategic partner with long-term financial and technological stakes. This balanced approach allows Microsoft to continue benefiting from OpenAI’s breakthroughs while signaling a more open, market-oriented future for the AI startup.

OpenAI’s $250 Billion Buildout Begins

Beyond the financing deal, OpenAI is also preparing for a massive 17-gigawatt infrastructure expansion across the United States. The company has reviewed bids from nearly 800 vendors, with roughly 20 sites under advanced consideration across the Southwest, Midwest, and Southeast.

The buildout plan includes battery-backed solar facilities, refurbished gas turbines, and small modular nuclear reactors, underscoring OpenAI’s commitment to powering its models with sustainable energy sources. Partners like Nvidia, Oracle, and SoftBank are expected to play key roles in this next-generation infrastructure effort.

According to insiders, OpenAI’s proposal also includes extending the U.S. Advanced Manufacturing Investment Credit to cover critical grid components, an initiative that could have far-reaching implications for America’s clean energy and semiconductor supply chains.

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