OpenAI Completes For-Profit Restructuring, Microsoft Secures 27% Stake Worth $135 Billion

In 2015, OpenAI launched with a mission "to ensure that artificial general intelligence benefits all of humanity." The founders chose a nonprofit structure specifically to avoid, in their own words, "advancing the private gain of any person." Top researchers reportedly turned down offers worth two to three times their market value because they believed in the mission.

On Tuesday, that mission got a valuation: $130 billion. That's what the nonprofit foundation now holds in equity. Microsoft, meanwhile, secured a $135 billion stake—27% of the newly restructured OpenAI Group Public Benefit Corporation.

The restructuring, announced jointly by both companies, converts OpenAI's for-profit arm into a public benefit corporation while the nonprofit—now called the OpenAI Foundation—retains legal control over the for-profit entity. The agreement extends Microsoft's access to OpenAI's technology through 2032, including any models that achieve artificial general intelligence, pending verification by an independent expert panel.

OpenAI chair Bret Taylor described the move as maintaining "the strongest representation of mission-focused governance in the industry today." Microsoft added in its blog post that "both companies are better positioned than ever to continue building great products that meet real-world needs."

The new structure lifts a key restriction on OpenAI's ability to raise capital—a limitation that dated back to its 2019 partnership with Microsoft. Under that original agreement, OpenAI operated with strict equity caps: investors could earn returns capped at roughly 100 times their initial investment, after which the company would revert to nonprofit control. That arrangement was designed to prevent the company from prioritizing profits over its founding mission.

So what changed? According to OpenAI's own explanation from earlier this year, the answer is money. The company stated it would need to raise capital "on the order of $10B" to build AGI, and that its capped-profit structure had become "increasingly untenable" as fundraising became more ambitious. SoftBank's $30 billion investment earlier this year was explicitly contingent on OpenAI's conversion to for-profit status.

The numbers are staggering. OpenAI is now valued at $500 billion—the most valuable private company in history. As part of Tuesday's announcement, OpenAI contracted to purchase $250 billion in Azure cloud services from Microsoft. The company has signed roughly $1 trillion in computing deals this year alone.

Microsoft has invested $13.8 billion in OpenAI since 2019. Tuesday's deal implies the company generated a return of nearly 10 times its investment in six years. Microsoft shares rose 2% on the news, pushing its market valuation above $4 trillion.

The restructuring faced significant legal scrutiny. California and Delaware attorneys general spent nearly a year investigating the plan. California AG Rob Bonta told reporters his office "secured concessions that ensure charitable assets are used for their intended purpose" and that OpenAI committed to remain in California. The California agreement also requires OpenAI to "continue to undertake measures to mitigate risks to teens and others in connection with the development and deployment of AI and of AGI."

Under the new deal, Microsoft maintains access to OpenAI's IP—excluding consumer hardware—through 2032 or until AGI is achieved, whichever comes first. Microsoft can now pursue AGI development independently, though with computing limitations if it reaches AGI using OpenAI's technology before OpenAI does. Microsoft also relinquished its exclusive cloud provider rights, though OpenAI's massive Azure commitment ensures the companies remain deeply intertwined.

The foundation will make an initial $25 billion commitment to work in health, education, and science. The nonprofit holds 26% of the for-profit, while current and former employees and investors hold 47%—the remaining 27% belongs to Microsoft.

But here's the question that hangs over all of this: When Sam Altman wrote to Elon Musk in 2015 proposing "the tech belongs to the world via some sort of nonprofit," when he said in 2017 that "we're a nonprofit: we don't ever want to be making decisions to benefit shareholders," when he said in 2020 that capturing "the light cone of all future value in the universe" was "for sure not okay for one group of investors"—did he mean any of it?

Or was it always the plan to use the nonprofit structure to attract top talent and goodwill donations, then pivot to for-profit once the technology was sufficiently developed and the market position was secure?

The restructuring faced fierce opposition. Nobel laureates and former OpenAI employees wrote to state attorneys general arguing that no amount of money could compensate the nonprofit for giving up control over the company closest to building AGI. Legal experts warned that public benefit corporations can choose how they balance mission with profit-making, and that controlling shareholders have large influence over how closely a PBC sticks to its mission.

OpenAI insists the nonprofit retains control and that its mission-focused governance remains intact. The foundation does appoint the board and holds voting rights. But the foundation's 26% stake means it's now a minority stakeholder in the company it founded—holding less equity than Microsoft, and barely more than employees and investors combined.

Perhaps the most telling detail is how routine this all feels. The AI industry has normalized valuations that would have seemed absurd five years ago. $500 billion for a company that's never turned a profit. $1 trillion in computing deals. $250 billion cloud commitments. Everyone just picked a number—$20 for subscriptions, $135 billion for equity stakes—and the market accepted it.

This is how every tech boom works: grand promises about changing the world, followed by the quiet realization that the most valuable thing you built was a captive market and switching costs. OpenAI spent a decade positioning itself as the company developing AGI safely. Now it's a public benefit corporation valued at half a trillion dollars, with Microsoft owning 27% and the nonprofit that founded it holding just slightly more.

The mission remains "ensuring artificial general intelligence benefits all of humanity." The structure just changed to better serve it. At least, that's what the blog posts say.