Microsoft has revalued its stake in OpenAI at $135 billion as both companies reshape their partnership amid rising regulatory scrutiny and lawsuits over alleged monopolistic practices. The revamped deal gives OpenAI greater operational independence while ensuring Microsoft remains a central partner in the race toward artificial general intelligence (AGI).
Under the new structure, OpenAI has transitioned into a public-benefit company, OpenAI Group PBC, governed by the nonprofit OpenAI Foundation. Microsoft will continue as OpenAI’s “frontier model partner” until 2032, maintaining exclusive intellectual property rights over its models and products, including post-AGI systems. However, OpenAI can now work with other developers, deploy open-weight models that meet safety requirements, and collaborate with U.S. national security agencies using any cloud infrastructure, effectively ending Microsoft’s previous cloud exclusivity.
The updated terms also redefine OpenAI’s governance. CEO Sam Altman and board chair Bret Taylor now hold the authority to appoint and dismiss board members, further consolidating Altman’s leadership. Microsoft will continue to receive roughly 20% of OpenAI’s revenue, a clause that will expire once an independent panel verifies the achievement of AGI. While Microsoft retains exclusive licensing rights through 2032, it forfeits claims over any consumer hardware OpenAI develops.
The restructuring coincides with intensifying legal challenges. A class-action lawsuit filed earlier this month accuses Microsoft of exploiting its dominance in cloud computing via Azure to artificially inflate ChatGPT’s pricing, allegedly keeping subscription rates as much as 200 times higher than rival offerings. The company is also under antitrust investigation for its expansive influence over OpenAI’s infrastructure and pricing model.
Despite these pressures, both firms are doubling down on their AI ambitions. OpenAI has committed to purchasing an additional $250 billion worth of Azure services, though Microsoft has relinquished its right of first refusal for future compute contracts. This decision comes as OpenAI’s user base surpasses 800 million weekly active users, straining infrastructure capacity and costs.
The partnership, which began in 2019 with Microsoft’s initial $1 billion investment, has evolved through several expansions—most notably in 2023, when Microsoft’s multibillion-dollar infusion positioned it as OpenAI’s largest backer. The latest changes aim to balance independence and cooperation, ensuring both can pursue AGI research without stifling competition or innovation.
As AI continues to dominate global discourse, critics warn that the concentration of AI power among a few large corporations could entrench systemic bias and erode public trust. “When a few powerful entities control AI, we risk creating systems that reflect a narrow worldview,” said Jiahao Sun, CEO of FLock.io.
