Microsoft (NASDAQ:MSFT) shares climbed 4% Tuesday morning after the company unveiled a new definitive agreement with OpenAI that values its stake in the AI developer at approximately $135 billion.
The updated deal expands on the companies’ partnership established in 2019. Microsoft now holds roughly 27% ownership in OpenAI Group PBC on an as-converted diluted basis — a significant share across employees, investors, and the OpenAI Foundation.
Under the new terms, Microsoft will remain OpenAI’s exclusive frontier model partner, retaining extended intellectual property rights through 2032. These rights will cover all models developed after Artificial General Intelligence (AGI) is achieved, subject to additional safety measures.
Key changes in the agreement include independent verification of any AGI declaration and the extension of Microsoft’s IP rights to post-AGI models. OpenAI has also committed to purchasing $250 billion in additional Azure services. However, Microsoft will no longer have first refusal rights as OpenAI’s compute provider.
The restructured partnership gives both sides more flexibility. OpenAI can now develop products with third parties and offer API access to U.S. national security customers regardless of their cloud provider. Meanwhile, Microsoft gains the option to pursue AGI development independently or with other partners.
This new framework follows months of negotiations, marking a significant evolution in one of the most closely watched alliances in the AI industry.