Microsoft and OpenAI just rewrote the rules of their partnership. The new terms tell you a lot about where both companies think AI is heading. Microsoft now holds roughly 27% of OpenAI's public benefit corporation, valued at about $135 billion. That's down from 32.5% before recent funding rounds. But the IP rights got sweeter. Microsoft keeps exclusive access to OpenAI's models through 2032. Those rights now extend past AGI, whatever that turns out to mean. And that's the strange part. The entire deal hinges on AGI being "verified by an independent expert panel." Nobody's saying who sits on this panel. How they're chosen. What metrics they'll use. AGI remains a fuzzy concept that serious researchers disagree on. Yet Microsoft and OpenAI have built billion-dollar financial triggers around it. The revenue share ends when this panel confirms AGI. Microsoft's research IP rights expire then too, or in 2030, whichever comes first. Building a contract around a milestone with no agreed-upon definition is quite the gamble. Actually, it's more than a gamble. It's a blank check. Whoever defines AGI controls when billions in revenue sharing stop flowing. That's an enormous concentration of power for a panel that, right now, exists only on paper. OpenAI got more breathing room. They can now co-develop products with other companies, release open weight models, and serve US government national security customers on any cloud. Non-API products can run anywhere. API products stay Azure-exclusive. Microsoft lost its right of first refusal as OpenAI's compute provider, though OpenAI committed to buying $250 billion in Azure services. That's a big number. It buys Microsoft less exclusivity than before. The deal also lets Microsoft build its own path to AGI, alone or with other partners. If they use OpenAI's IP before AGI is declared, the models face compute thresholds well beyond today's leading systems. A guardrail, but a vague one. Both companies wanted out of the tighter arrangement. OpenAI needed room to compete with rivals like Anthropic without Microsoft's exclusivity getting in the way. They released new principles advocating for democratized AGI and shared prosperity as part of this new phase. What should bother anyone watching this space: two of the most powerful companies in AI just agreed that a nonexistent panel of unnamed experts will decide when one of the most consequential technological thresholds in history has been crossed. They've attached real money to that decision. The panel has no members, no charter, no public process. When it materializes, it will answer to no one but the companies that created it.
OpenAI and Microsoft Bet $135B on a Panel That Doesn't Exist Yet
OpenAI and Microsoft have signed a new definitive agreement modifying their long-standing partnership. Microsoft supports OpenAI's transition to a public benefit corporation with recapitalization, holding approximately 27% stake valued at $135B. Key changes include: Microsoft's IP rights extended through 2032 including post-AGI models; OpenAI can now jointly develop products with third parties and serve non-API products on any cloud; Microsoft can independently pursue AGI; OpenAI committed to purchasing $250B of Azure services; Microsoft loses right of first refusal as compute provider. The agreement also allows OpenAI to release open weight models and provide API access to US government national security customers.