OpenAI and Microsoft are reconfiguring their partnership terms to facilitate the ChatGPT developer’s potential initial public offering (IPO) while safeguarding Redmond’s access to top AI models. According to reporting by the Financial Times, a key point under discussion is the equity Microsoft will hold in OpenAI’s new for-profit entity in return for its investment, which exceeds $13bn. Microsoft is reportedly willing to relinquish some of its equity in exchange for technological access beyond 2030.
Simultaneously, the companies are updating a broader contractual arrangement initially formed when Microsoft invested $1bn in the AI start-up in 2019. Recently, a report in The Information indicated that OpenAI plans to decrease Microsoft’s share of revenue from 20% to a minimum of 10% by the end of the decade as part of a comprehensive restructuring strategy. This approach seeks to reinforce the role of OpenAI’s nonprofit parent entity, potentially impacting CEO Sam Altman’s authority over strategic decisions. Under current agreements, Microsoft benefits from a revenue-sharing model that grants it access to OpenAI’s AI models, which are integrated into Azure cloud services and other software applications.
Adjusting revenue models to strengthen nonprofit governance
Last week, OpenAI abandoned its controversial plans to strip ultimate control from its nonprofit board. However, it maintained intentions for its business unit to transition into a public benefit corporation, a model that balances profit-making with social good objectives. This corporate structure, already employed by rivals like Anthropic and Elon Musk’s venture xAI, enables OpenAI to offer equity to investors. According to the Financial Times, an unnamed source familiar with the matter indicated that this shift is a critical requirement from investors and will pave the way for a potential IPO in the future.
In January, Microsoft modified terms of its agreement with OpenAI after launching a joint venture with Oracle and Japan’s SoftBank Group aimed at building up to $500bn in new AI data centres throughout the US. Following several months of internal deliberation and mounting legal challenges, including opposition from co-founder Elon Musk, OpenAI ultimately decided not to convert into a for-profit entity.
In March 2025, OpenAI awarded an $11.9bn contract to CoreWeave, aimed at bolstering its AI infrastructure and increasing computing capabilities for global distribution of its models. As part of this collaboration, OpenAI will also invest $350m in CoreWeave stock, a transaction independent from CoreWeave’s anticipated IPO. This change highlights evolving dynamics in OpenAI’s relationship with Microsoft, which continues as a major supporter through revenue-sharing agreements but no longer holds exclusive rights as cloud provider.
Recently, Microsoft reported financial results for the third quarter of fiscal year 2025 that exceeded market expectations. This success was attributed to expanded partnerships beyond OpenAI and the integration of generative models across various product lines, including productivity tools, developer platforms, and search infrastructure.
Read more: Microsoft Q3 FY25 results beat estimates as AI and cloud momentum continues
