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Microsoft Corporation (NASDAQ:MSFT) and OpenAI announced a non-binding agreement to strengthen their artificial intelligence partnership, sending Microsoft shares up 1.7% in after-hours trading. While financial terms remain undisclosed, both companies said they are finalizing a definitive contract to guide the “next phase” of collaboration.
OpenAI revealed that its non-profit entity will hold an equity stake exceeding $100 billion in its new for-profit arm, structured as a Public Benefit Corporation (PBC). This model allows the startup to raise capital more conventionally while maintaining a commitment to broader social impact. OpenAI emphasized that its mission to develop advanced artificial intelligence, including artificial general intelligence (AGI), remains its core focus.
Founded in 2015 as a non-profit, OpenAI introduced a capped-profit structure in 2019 to attract funding and reward employees. However, the success of ChatGPT in late 2022 and soaring operational costs pushed the company to pursue profitability more aggressively. The shift to a PBC framework paves the way for potential public offerings and greater investor participation.
Microsoft has been a key partner since investing $1 billion in 2019, followed by an additional $10 billion in early 2023. While Microsoft initially provided exclusive computing resources, OpenAI is now building independent infrastructure under “Project Stargate” with support from Japan’s SoftBank Group (TYO:9984). SoftBank has also signaled plans to invest up to $40 billion, potentially making it the largest OpenAI stakeholder.
With increased funding opportunities, OpenAI aims to scale its AI capabilities and compete with rivals such as Google DeepMind and Anthropic. The company’s for-profit transition highlights its growing role in the global AI race, while the PBC designation underscores its responsibility to balance innovation, profitability, and public benefit.
