Microsoft is reportedly in advanced talks with OpenAI for a new agreement that would give it ongoing access to the startup’s technology, even if OpenAI achieves what it defines as AGI, or advanced general intelligence. If the deal goes through, it would clear a key hurdle in OpenAI’s transition toward becoming a fully commercial enterprise.
The companies have been negotiating regularly and could reach an agreement in a few weeks, according to sources. While talks have been positive, potential roadblocks remain, including regulatory scrutiny and Elon Musk’s lawsuit to block OpenAI’s for-profit transition.
OpenAI is currently structured as a mission-driven nonprofit overseeing a capped for-profit company, a setup designed to limit commercialization and fundraising. Despite this, OpenAI has raised billions and operates like a traditional tech company while seeking to remove its constraints.
Microsoft, OpenAI’s biggest backer with $13.75 billion invested and rights to some of its intellectual property, has posed challenges to OpenAI’s shift to a for-profit model. Negotiations have dragged on for months as Microsoft seeks a larger stake in the restructured company and aims to secure long-term access to OpenAI’s technology.
The current agreement between the two companies expires in 2030 or whenever OpenAI declares it has achieved AGI—though the definition of AGI remains unclear. Microsoft relies heavily on OpenAI’s models, integrating them into Azure OpenAI Service and its Copilot tools across Windows, Office, and GitHub. If OpenAI were to cut off access after claiming AGI, Microsoft would lose a major strategic advantage.
OpenAI has reportedly informed investors that it expects to reduce the revenue share it pays Microsoft by 2030. Additionally, OpenAI hopes to ensure Microsoft deploys its technology safely, especially as it nears AGI.
Microsoft also stands to benefit from OpenAI’s transition to a for-profit company. The current structure limits investor returns, but a standard commercial setup would allow Microsoft to gain formal equity and significant financial returns alongside continued access to OpenAI’s technology. Sources indicate Microsoft is negotiating for an equity stake in the low- to mid-30% range.