Microsoft and OpenAI Refine Partnership with New Agreement Focused on Long-Term Innovation
Published on October 28, 2025 at 01:00 PM
Microsoft and OpenAI have entered a new phase in their collaboration, marked by a definitive agreement designed to foster long-term innovation and growth for both organizations. This agreement builds upon the partnership established in 2019, which has since become a cornerstone of the AI industry.
Key Highlights of the New Agreement:
- Investment and Recapitalization: Microsoft supports OpenAI's move to a public benefit corporation (PBC) structure and recapitalization. Microsoft now holds an investment valued at approximately $135 billion, representing around 27% ownership of OpenAI Group PBC.
- Preserved Partnership Elements: OpenAI remains Microsoft’s primary partner for frontier AI models, and Microsoft retains exclusive IP rights and Azure API exclusivity until Artificial General Intelligence (AGI) is achieved.
- AGI Verification: Upon OpenAI declaring AGI, an independent expert panel will verify the declaration.
- Extended IP Rights: Microsoft’s IP rights for models and products are extended through 2032 and encompass models developed post-AGI, subject to safety protocols.
- Research IP: Microsoft retains IP rights to research methods used in model and system development until AGI verification or 2030, whichever occurs first. Non-Research IP rights, including model architecture, weights, and inference code, are retained.
- Consumer Hardware and Third-Party Products: Microsoft's IP rights now exclude OpenAI’s consumer hardware, and OpenAI can jointly develop some products with third parties. API products developed with third parties will be exclusive to Azure, while non-API products may be served on any cloud provider.
- Independent AGI Pursuit: Microsoft can independently pursue AGI, alone or with third parties.
- Revenue Sharing and Azure Consumption: The revenue share agreement remains until AGI verification, and OpenAI has contracted to purchase an incremental $250B of Azure services. Microsoft no longer has the right of first refusal as OpenAI's compute provider.
- Government Access and Open Weight Models: OpenAI can provide API access to US government national security customers, regardless of cloud provider, and is now able to release open weight models meeting capability criteria.