OpenAI Completes Restructuring: New Microsoft Deal for AGI

Metaverse Planet October 29, 2025Last Updated: October 29, 2025

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OpenAI has completed its restructuring process, transforming into a public benefit corporation. The new agreement with Microsoft clarifies the terms of their technology rights and partnership in the era of AGI.

OpenAI has concluded its long-standing and debated restructuring process, adopting a new corporate structure and signing a comprehensive cooperation agreement with Microsoft. According to the company’s statement, this new arrangement clarifies not only future consumer hardware projects but also the steps to be taken when Artificial General Intelligence (AGI) is developed.

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A New Era for OpenAI

OpenAI’s for-profit arm will now operate as a public benefit corporation under the name “OpenAI Group PBC.” Its non-profit arm has been renamed the “OpenAI Foundation” and its shares in the for-profit structure were valued at approximately $130 billion. Initially, the Foundation will focus on health, disease research, and “AI resilience” with a budget of $25 billion. Furthermore, the Foundation will gain additional share ownership once OpenAI’s market value surpasses a specific threshold.

This development came after lengthy negotiations with the Attorneys General of California and Delaware, whose approval was essential for the restructuring to proceed. The process was also overshadowed by the legal battle with Elon Musk. Musk, who co-founded OpenAI in 2015, sued both the company and CEO Sam Altman over the change in its direction.

Originally, OpenAI planned to transition into a completely for-profit entity. However, with the latest arrangement, the OpenAI Foundation will continue to hold shares valued up to $100 billion in the company and maintain its general oversight authority. The most debated issue for some time was whether the Foundation’s structure would retain its oversight over the potential AGI technology developed in the future. Defined as systems that will equal or surpass human cognitive capacity, AGI is the ultimate goal toward which both OpenAI and its competitors are investing billions of dollars.

Critical Innovations in the Microsoft Agreement

Concurrent with the restructuring, OpenAI signed a new strategic agreement with Microsoft, removing significant limitations that existed in the two companies’ 2019 agreement. Microsoft has reduced its former 32.5% stake in the for-profit structure to approximately 27% in the new arrangement, a share reportedly valued at around $135 billion. Microsoft initially invested $13.8 billion in OpenAI in 2019.

With the new agreement, the “AGI clause,” one of the biggest uncertainties between the two companies, has been clarified. Now, the claim that AGI has been developed must be verified not only by OpenAI but also by an independent panel of experts.

Additionally, Microsoft’s intellectual property rights over OpenAI technology have been extended until 2032 and broadened to cover post-AGI models. However, Microsoft’s rights are subject to specific limits. The company’s access to research-based intellectual property will end by 2030 or based on the date the expert panel confirms the AGI breakthrough. Furthermore, the revenue-sharing agreement between the parties (20%) is preserved, but payments will be spread over a longer period.

Another notable innovation is that Microsoft will no longer hold any intellectual property rights in OpenAI’s consumer hardware projects. This means the mysterious device known to be developed with Apple’s legendary designer Jony Ive will be entirely under OpenAI’s control.

The new agreement also makes the partnership more flexible. OpenAI can now collaborate with third parties and release some of its models as open weight. Microsoft’s right to be the preferential cloud provider has also ended. In return, the company has committed to an additional $250 billion in purchases of Azure services.

Microsoft is also now entitled to develop AGI independently or with other partners. Should the company produce AGI using OpenAI’s technology, its models will be subject to certain processing power quotas.

This entire restructuring process was not an option but a necessity for OpenAI. The company has undertaken an unprecedented level of responsibility by signing dozens of infrastructure deals. OpenAI faces a financial commitment of $1.4 trillion to build 30 GW of data center infrastructure over the next few years. According to OpenAI, the cost of each GW installation is $50 billion.