Key Highlights –
- OpenAI announced that its non-profit parent organization will maintain oversight of the company and will possess an equity interest exceeding $100 billion.
- OpenAI Chairman Bret Taylor claims that this move will makes it “one of the most well-resourced philanthropic organizations in the world.”
- Microsoft and OpenAI are both “actively working to finalize contractual terms in a definitive agreement.”
In an highly anticipatory move, both OpenAI and Microsoft announced on Thursday that they have reached a non-binding memorandum of understanding (MOU). Tech giant Microsoft, which is also its largest investor since 2019, have agreed on a revised partnership which now allow the ChatGPT owner to convert its for-profit arm into a public benefit corporation (PBC). This strategic shift allows both companies to pursue a more open, independent and diverse ecosystem as they seem fit.
OpenAI started as a nonprofit, remains one today, and will continue to be one – with the nonprofit holding the authority that guides our future.
— OpenAI Newsroom (@OpenAINewsroom) September 11, 2025
As previously announced and as outlined in our non-binding MOU with Microsoft, the OpenAI nonprofit’s ongoing control would now be…
A Look At Microsoft, OpenAI’s Long Standing Partnership
Started way back in 2019, the partnership between Microsoft and OpenAI has been nothing short of crucial in AI development we see today. The collaboration began with a foundational $1 billion investment from Microsoft, which gave the tech giant exclusive rights to commercialize OpenAI’s technology through its Azure cloud platform. This relationship further deepened significantly with an additional $10 billion investment in 2023.
For years, Microsoft relied on this exclusive access to power its generative AI tools, embedding OpenAI’s models into its products like Microsoft 365 Copilot and Bing Chat, giving it considerable edge over rivals like Google and Amazon.
A joint statement from Microsoft and OpenAI https://t.co/6qDAwTQbP3 https://t.co/VOTLNihsBi
— Microsoft News and Stories (@MSFTnews) September 11, 2025
However, this close collaboration between the two organisations inevitably came at a “cost.” The arrangement was so tight that any significant shift by either of the company would inevitably impact the other, for good or for worse. This dynamic became increasingly evident as OpenAI’s ambitions grew varied, with now aiming towards becoming a Public Benefit Corporation(PBC).
Moving Ahead with ‘Revised’ Agreement
The new agreement acknowledges the need for both companies to pursue their own growth trajectories. OpenAI, in its pursuit of vast computing power, has secured a $300 billion, five-year cloud deal with Oracle, as reported by Reuters. This partnership is crucial for the ambitious Project Stargate plan, with its goal to build massive AI data centres.
Given the increased usage of ChatGPT and other AI models by OpenAI, this diversification was much needed in order to meet the booming demand of users as well as to fuel its research and development. In a statement on its blog, OpenAI’s board chairman Bret Taylor explained that the restructuring into a public benefit corporation will provide its nonprofit parent with a massive stake, valued at over $100 billion, making it one of the “most well-resourced philanthropic organizations in the world.” He adds –
This recapitalization would also enable us to raise the capital required to accomplish our mission—and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact.
On the other hand, Microsoft has also been branching out its own AI supply chain. We recently covered how the tech giant began integrating models from OpenAI’s rival, Anthropic, into its Office 365 applications. Moreover, the company also launched its own in-house AI models, MAI-Voice-1, MAI-1-preview.
This shift to a multi-model strategy reduces Microsoft’s dependence on OpenAI and allows it to select the best-performing AI for specific tasks, for example using Anthropic’s Claude AI to create presentations in PowerPoint or perform analysis in Excel. Once the contractual terms between the two companies are finalized, it will not be a surprise to see them seeking out partnerships that were once off-limits.
