Microsoft Deepens Partnership with OpenAI, Now Holds 27% Ownership

Published: 30 Oct 2025

Author: Precedence Research

Share :

Microsoft and OpenAI have entered into a new collaborative agreement. OpenAI has reestablished itself as a public benefit corporation. Following the recapitalization, Microsoft has invested nearly $135 billion in OpenAI Group PBC, representing roughly 27% on an as-converted, diluted basis, alongside all owners, employees, the OpenAI Foundation, and several investors.

What This Agreement Will Offer?

The declaration, once issued by OpenAI for artificial general intelligence, will be verified by a separate expert panel. Microsoft’s IP rights for models and products are extended to 2032 and now include post-AGI work, provided it follows proper safety rules. Microsoft's IP rights to research, defined as the confidential methods used in the development of models and systems, will be held until the expert panel allows AGI to proceed through the verification process by 2030.

For example, research IP includes models designed for internal deployment or research only. Besides, research IP will not include model architecture, model weights, inference code, finetuning code, and IP related to data center hardware and software. Microsoft will retain these non-research IP rights. Microsoft's IP rights now exclude OpenAI's consumer hardware. OpenAI further develops some products in collaboration with third parties. However, these products will be exclusive to Azure. Any cloud provider may serve non-API products. Also, Microsoft can independently pursue AGI solely or in partnership with third parties.

To develop AGI, if Microsoft uses OpenAI’s IP, models will be subject to compute thresholds before AGI is declared operational. Those thresholds must be larger than the system size used to train the current leading models. OpenAI can also offer API access to U.S. government national security customers, regardless of the cloud provider. Also, OpenAI has signed a contract to purchase an incremental $250B in Azure services, and Microsoft will no longer have the right of first refusal to be OpenAI's compute provider.

This deal effectively eliminates most of the hurdles to raising capital for OpenAI, while also giving the company greater freedom to work with several third parties.