New agreement reached with Microsoft
OpenAI has announced a new tentative agreement with Microsoft, highlighting a shift in its governance and partnership strategy. As part of this move, OpenAI’s nonprofit parent will receive a $100 billion equity stake in the for-profit subsidiary responsible for developing AI products like ChatGPT. This development marks a significant restructuring, although it remains unclear whether the nonprofit will retain controlling power.
The agreement is nonbinding and comes as both companies redefine the next phase of their long-standing collaboration. Since 2019, Microsoft has been a key investor in OpenAI, providing the exclusive computing infrastructure needed to develop advanced AI systems. In return, Microsoft has integrated OpenAI’s technology across its own product offerings.
Regulatory scrutiny intensifies
OpenAI’s restructuring has drawn attention from regulators and legal authorities. California Attorney General Rob Bonta confirmed an ongoing investigation into OpenAI’s financial and governance changes, citing a need to protect charitable assets. Bonta and Delaware Attorney General Kathy Jennings recently met with OpenAI representatives to express concern over the safety of ChatGPT and to reaffirm the nonprofit’s original mission.
“We are particularly concerned with ensuring that the stated safety mission of OpenAI as a non-profit remains front and center,” Bonta emphasized in a recent statement. The nonprofit status of OpenAI, established in 2015, continues to play a central role in its decision-making, even as its for-profit arm expands.
Partnership with Oracle and future direction
Earlier this year, OpenAI and Microsoft modified their previous agreement to allow OpenAI to build its own computing infrastructure, primarily for research and training. This change was followed by a partnership announcement with Oracle to establish a major data center in Abilene, Texas. Despite this growing independence, OpenAI and Microsoft affirmed in their joint statement that they are still finalizing a definitive agreement.
While both companies have remained largely silent beyond the statement, insiders suggest that the restructured partnership will aim to balance autonomy for OpenAI with continued collaboration on technological development and infrastructure.
Debate over AGI and nonprofit control
One of the most debated aspects of OpenAI’s structure is the board’s authority to determine when its AI reaches artificial general intelligence (AGI) — a level where AI systems surpass humans in most economically valuable tasks. According to existing agreements, if OpenAI reaches AGI, Microsoft’s rights to commercialize the technology would end, since those rights apply only to pre-AGI systems.
This clause, along with OpenAI’s nonprofit structure, has become central to a lawsuit filed by Elon Musk. A co-founder and early funder of OpenAI, Musk alleges that the company has strayed from its original promise to prioritize humanity’s benefit and is now leaning toward commercial exploitation. The legal case seeks to halt further erosion of nonprofit control over OpenAI’s operations.
