Microsoft–OpenAI Deal Redefines Partnership Rules for the AGI Era
OpenAI gains greater autonomy, including the ability to co-develop products with third parties and release open-weight models that meet capability and safety criteria.
Microsoft and OpenAI have entered a new phase in their landmark partnership, signing a definitive agreement that redefines their collaboration as OpenAI transitions into a Public Benefit Corporation (PBC).
The deal marks a major evolution from Microsoft’s initial 2019 investment in OpenAI into what both companies describe as a long-term strategic alignment for the next era of AI innovation.
Following a recapitalisation, Microsoft’s investment in OpenAI Group PBC is now valued at $135 billion, representing roughly 27% ownership on a diluted basis, including employees and the OpenAI Foundation.
The agreement maintains Microsoft as OpenAI’s exclusive frontier model and Azure API partner until the arrival of Artificial General Intelligence (AGI).
Under the new agreement, any AGI declaration by OpenAI must be verified by an independent expert panel—marking the first formal mechanism to define and confirm AGI.
Microsoft’s intellectual property (IP) rights for OpenAI’s models and products are now extended through 2032 and will include models developed after AGI’s arrival, subject to strict safety guardrails.
The company can also independently pursue AGI development—either alone or with third parties—while using OpenAI’s IP within defined compute thresholds that far exceed current model scales.
Meanwhile, OpenAI gains greater autonomy, including the ability to co-develop products with third parties and release open-weight models that meet capability and safety criteria.
The company has also agreed to purchase an additional $250 billion worth of Azure services but is no longer bound by Microsoft’s right of first refusal for compute resources.
The updated framework preserves Microsoft’s exclusive Azure API rights until AGI is verified and extends certain research IP protections through 2030. However, OpenAI’s consumer hardware is now excluded from Microsoft’s IP scope.
Together, these provisions signal a more balanced partnership designed for the AGI era—one that introduces external oversight, shared responsibility, and defined boundaries for collaboration in the race toward artificial general intelligence.
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