Microsoft and OpenAI's new for-profit deal gives Windows maker 27% stake

Core Insights - Microsoft and OpenAI have reached a new agreement allowing OpenAI to transition into a for-profit public benefit corporation [1] - Microsoft will hold a 27% stake in OpenAI Group PBC, valued at approximately $135 billion, while OpenAI's nonprofit arm will maintain a $130 billion stake [2] - Microsoft will no longer have the right of first refusal as OpenAI's cloud provider, but OpenAI has contracted to purchase $250 billion worth of Azure services [2] Agreement Modifications - The duration of Microsoft's rights to use OpenAI's models and products has been extended through 2032, excluding consumer hardware [3][4] - Microsoft will lose rights to OpenAI's research upon confirmation of AGI or by 2030, whichever comes first, and will end its revenue-sharing agreement with OpenAI upon AGI confirmation [5] Product Development and Collaboration - OpenAI is allowed to develop products with third parties, but API products will remain exclusive to Microsoft's Azure cloud platform, while non-API products can utilize any cloud vendor [6] - Microsoft is permitted to pursue AGI independently, but if it achieves AGI using OpenAI's technology first, it will be subject to compute thresholds [6] Market Impact - Microsoft's stock price increased by approximately 2% following the announcement of the agreement [4] - The partnership has significantly benefited both companies, positioning them as leaders in the AI sector, ahead of competitors like Amazon and Google [7][8]