In a significant advancement of their long-standing collaboration, Microsoft and OpenAI today announced a new definitive agreement that “builds on our foundation, strengthens our partnership, and sets the stage for long-term success for both organizations.” Under the new terms, Microsoft supports OpenAI’s board in converting it into a public benefit corporation (PBC), with Microsoft’s investment valued at approximately $135 billion representing roughly 27 percent on an as-converted diluted basis. Core elements of the prior partnership remain: OpenAI remains Microsoft’s frontier model partner, and Microsoft retains exclusive IP rights and Azure API exclusivity up to the point when artificial general intelligence (AGI) is declared by OpenAI.
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The agreement also introduces new provisions: AGI will now be verified by an independent expert panel, Microsoft’s IP rights are extended through 2032 (including post-AGI models) with specific definitions around research IP, model architecture, weights and inference code. OpenAI is now permitted to work with third-party partners on joint products, with exclusive Azure API access for those products, while non-API offerings may run on any cloud; Microsoft in turn may pursue AGI independently or in partnership. Additionally, OpenAI is committed to purchasing an incremental US$250 billion of Azure services, Microsoft relinquishes its right of first refusal to OpenAI compute provider status, and OpenAI now has the ability to provide API access to U.S. national-security customers regardless of cloud provider. As the companies embark on this next chapter, they believe they are “better positioned than ever to continue building great products that meet real-world needs, and create new opportunity for everyone and every business.”
