Microsoft's deal with OpenAI

Extracted Attributes

• Profit Cap

  10 times Microsoft's investment

• Profit Share

  49% of OpenAI Global, LLC's profits

• Investment Amount

  US$13 billion (total from Microsoft)

• OpenAI Headquarters

  San Francisco, California, USA

• OpenAI Founding Date

  2015-12

• OpenAI API Exclusivity

  Exclusive to Azure, runs on Azure, available through Azure OpenAI Service

• Initial Investment Date

  2019

• Major Investment Amount

  Up to US$10 billion

• New Capacity Exclusivity

  Microsoft has a right of first refusal (ROFR)

• Initial Investment Amount

  US$1 billion

• Computing Resources Provided

  Microsoft Azure cloud platform

• Microsoft's Technology Access

  Broad rights to OpenAI technology until Artificial General Intelligence (AGI) is reached

• Major Investment Announcement Date

  2023-01-23

Timeline

• OpenAI, Inc. is founded with the goal to develop 'safe and beneficial' artificial general intelligence (AGI). (Source: summary)

  2015-12

• Microsoft makes its initial US$1 billion investment in OpenAI, marking the beginning of their partnership. (Source: web_search_results)

  2019

• OpenAI releases ChatGPT, which is credited with catalyzing widespread interest in generative AI. (Source: summary)

  2022-11

• Microsoft announces the 'third phase' of its long-term partnership with OpenAI, involving a multiyear, multibillion-dollar investment of up to US$10 billion. (Source: web_search_results)

  2023-01-23

• Microsoft and OpenAI sign their most recent agreement, which outlines Microsoft's broad rights to OpenAI's technology until AGI is reached. (Source: web_search_results)

  2023

• OpenAI's board temporarily removes Sam Altman as CEO, citing a lack of confidence, but reinstates him five days later following a board reconstruction. (Source: summary)

  2023-11

• OpenAI faces multiple lawsuits for alleged copyright infringement against authors and media companies. (Source: summary)

  2023-2024

• Roughly half of OpenAI's AI safety researchers depart, citing industry-wide issues. (Source: summary)

  2024

OpenAI

OpenAI, Inc. is an American artificial intelligence (AI) organization founded in December 2015 and headquartered in San Francisco, California. It aims to develop "safe and beneficial" artificial general intelligence (AGI), which it defines as "highly autonomous systems that outperform humans at most economically valuable work". As a leading organization in the ongoing AI boom, OpenAI is known for the GPT family of large language models, the DALL-E series of text-to-image models, and a text-to-video model named Sora. Its release of ChatGPT in November 2022 has been credited with catalyzing widespread interest in generative AI. The organization has a complex corporate structure. As of April 2025, it is led by the non-profit OpenAI, Inc., registered in Delaware, and has multiple for-profit subsidiaries including OpenAI Holdings, LLC and OpenAI Global, LLC. Microsoft has invested US$13 billion in OpenAI, and is entitled to 49% of OpenAI Global, LLC's profits, capped at an estimated 10x their investment. Microsoft also provides computing resources to OpenAI through its cloud platform, Microsoft Azure. In 2023 and 2024, OpenAI faced multiple lawsuits for alleged copyright infringement against authors and media companies whose work was used to train some of OpenAI's products. In November 2023, OpenAI's board removed Sam Altman as CEO, citing a lack of confidence in him, but reinstated him five days later following a reconstruction of the board. Throughout 2024, roughly half of then-employed AI safety researchers left OpenAI, citing the company's prominent role in an industry-wide problem.

Web Search Results

• AI Partnerships Beyond Control Lessons from the OpenAI-Microsoft ...

  Observations from the Microsoft-Open AI partnership thus far warrant a closer look at other burgeoning relationships in this rather tight-knit ecosystem. To begin, OpenAI’s recent investment into CoreWeave, a cloud service provider, shifts the power dynamics of the Microsoft-OpenAI deal. Microsoft is CoreWeave’s biggest client. Pursuant to this deal, OpenAI will “not only have access to the same cloud, but it will also have an ownership stake in the company that runs it.” This means not only [...] collaboration was allowed as an exception. The agreement was presented as a three-way deal between Microsoft, OpenAI and OCI targeted at enabling OpenAI to “use the Microsoft Azure AI platform on Oracle’s infrastructure.” Nonetheless, commentators have argued that the lack of sufficient compute had given rise to tensions between OpenAI and Microsoft, and that the latter had to be pressured by its investors to accept the deal. [...] Fast forward to January 2023. Microsoft announced “the third phase” of their “long-term partnership with OpenAI through a multiyear, multibillion dollar investment” of up to $10 billion. This sizeable investment also involved Microsoft deploying OpenAI’s models in Microsoft’s products, as exemplified by Microsoft 365 Copilot.

• OpenAI - Wikipedia

  In January 2023, OpenAI Global, LLC was in talks for funding that would value the company at $29 billion, double its 2021 value.( On January 23, 2023, Microsoft announced a new US$10 billion investment in OpenAI Global, LLC over multiple years, partially needed to use Microsoft's cloud-computing service _Azure_.( Rumors of this deal suggested that Microsoft may receive 75% of OpenAI's profits until it secures its investment return and a 49% stake in the company.( The investment is believed to [...] In April 2025, OpenAI raised $40 billion at a $300 billion post-money valuation, marking the largest private technology deal on record. The financing round was led by SoftBank, with other participants including Microsoft, Coatue, Altimeter, and Thrive.( [...] On May 11, 2025, Financial Times reported that OpenAI and Microsoft are rewriting terms of their multibillion-dollar partnership in a negotiation designed to allow the ChatGPT maker to launch a future IPO, while protecting the software giant's access to cutting-edge AI models.(

• Why OpenAI and Microsoft's AI partnership might be headed for a ...

  Meanwhile, Microsoft still holds a significant share in OpenAI’s future profits. There are reports that OpenAI has proposed a deal to exchange Microsoft’s entitlement to future profits for a 33% stake in a restructured OpenAI. But Microsoft currently retains significant control over whether OpenAI can restructure and, under a 2023 agreement, is also believed to be entitled to access any OpenAI technology, including that acquired through acquisitions—potentially giving Microsoft access to [...] The relationship, which began with Microsoft’s $1 billion investment in OpenAI in 2019—and has since grown to include more than $10 billion in total funding—is built on Microsoft’s entitlement to 49% of OpenAI Global LLC’s profits, capped at roughly 10 times its investment. [...] OpenAI’s pending acquisition of AI coding startup Windsurf—valued at $3 billion—has pushed its partnership with Microsoft to the brink. Reports suggest that OpenAI executives have threatened an antitrust complaint if Microsoft insists on full access to Windsurf’s intellectual property after the deal closes. At the same time, Microsoft is reportedly uneasy about the prospect of OpenAI developing a competing Copilot product.

• Windsurf tests Microsoft's partnership with OpenAI - Axios

  Under their most recent agreement, signed in 2023,Microsoft has access to all of OpenAI's technology, including any it gets via acquisition. An exception could be made, but would have to be negotiated. OpenAI, meanwhile, has been floating the notion that both companies might save themselves some regulatory headaches if Microsoft doesn't have access to Windsurf, given it already owns GitHub, which makes a competing product. [...] OpenAI, which once got all its compute capacity from Microsoft, has moved to diversify, first with its Stargate project with Oracle and SoftBank and more recently in a deal with Google to use its cloud as well. What they're saying:"We have a long-term, productive partnership that has delivered amazing AI tools for everyone," the companies said in a joint statement. "Talks are ongoing and we are optimistic we will continue to build together for years to come." [...] Another big sticking point relates to a trigger in their existing deal that calls for Microsoft's access to be significantly curtailed once OpenAI has reached the threshold of artificial general intelligence. Right now Microsoft has extremely broad rights until AGI is reached and limited access beyond that point.

• Microsoft and OpenAI evolve partnership to drive the next phase of AI

  Microsoft and OpenAI have revenue sharing agreements that flow both ways, ensuring that both companies benefit from increased use of new and existing models. Microsoft remains a major investor in OpenAI, providing funding and capacity to support their advancements and, in turn, benefiting from their growth in valuation. [...] In addition to this, OpenAI recently made a new, large Azure commitment that will continue to support all OpenAI products as well as training. This new agreement also includes changes to the exclusivity on new capacity, moving to a model where Microsoft has a right of first refusal (ROFR). To further support OpenAI, Microsoft has approved OpenAI’s ability to build additional capacity, primarily for research and training of models. [...] for use within our products like Copilot. This means our customers have access to the best model for their needs. The OpenAI API is exclusive to Azure, runs on Azure and is also available through the Azure OpenAI Service. This agreement means customers benefit from having access to leading models on Microsoft platforms and direct from OpenAI.