OpenAI has reached a nonbinding agreement with Microsoft on a revised partnership that would allow the startup to convert its for-profit arm into a public benefit corporation (PBC).
Details of the new commercial arrangements were not disclosed, but the companies affirmed they were working to finalise the terms of a definitive agreement. According to CNN, this marks an important step in OpenAI’s talks with Microsoft as the former seeks to raise capital under a more common governance structure and eventually go public to fund artificial intelligence development.
Regulatory parts remain for OpenAI, as attorneys general in California and Delaware need to approve OpenAI’s new structure. The companies aim to complete the conversion by the end of 2025.
Microsoft invested USD 1 billion in OpenAI in 2019 and another USD 10 billion at the beginning of 2023. Under their previous agreement, Microsoft had exclusive rights to sell OpenAI’s software tools through its Azure cloud computing platform and had access to the startup’s technology.
More about the OpenAI x Microsoft partnership
Even though Microsoft was previously designated as OpenAI’s primary compute provider, it lessened its grip this year to allow OpenAI to pursue its own data center project, Stargate, as well as a USD 300 billion partnership with Oracle, and another cloud deal with Google.
As OpenAI’s revenue grows into the billions, it is seeking a more conventional corporate structure and partnerships with additional cloud providers to expand sales and secure the computing capacity needed to meet the growing demand.
This announcement follows the one from May 2025, when OpenAI and Microsoft were said to be renegotiating for new funding and an IPO. Through this move, OpenAI intended to roll out a future IPO and protect its access to advanced AI models, as detailed by the Financial Times.
