Newscasts - Microsoft agrees deal to allow OpenAI restructuring

C3.ai

12/09/2025 05:06

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Source: 'Reuters - Business videos'

Description: Microsoft and OpenAI said on Thursday they have signed a non-binding deal for new relationship terms that would allow OpenAI to proceed to restructure itself into a for-profit company, marking a new phase of the most high-profile partnerships to fund the ChatGPT frenzy. Julian Satterthwaite reports. 

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Video Transcript:

Microsoft and OpenAI have agreed to rejig the terms of their relationship. The non-binding agreement announced Thursday should allow the ChatGPT maker to proceed with turning itself into a for-profit company. Full details weren't disclosed, and the pair say they are still finalizing a definitive agreement. Microsoft invested $1 billion in OpenAI in 2019, and then another $10 billion in 2023. Under that agreement, it had exclusive rights to sell OpenAI's tools through its Azure cloud-computing platform. It was also once the AI pioneer's exclusive provider of computing capacity. But OpenAI wants a more conventional corporate structure, and the freedom to partner with other cloud providers. Microsoft wants continued access to OpenAI's technology even if the firm declares its AI to have reached human-like intelligence. Under the existing agreement, hitting that milestone would have terminated the partnership. Regulatory hurdles could yet get in the way of the new deal. It will have to be cleared by attorneys general in California and Delaware. But OpenAI hopes to complete the conversion to for-profit status by the end of the year, or risk losing billions in funding that is tied to that timeline.