Microsoft and OpenAI unveil a deal extending IP rights, adding independent AGI verification, and giving both sides more freedom while maintaining Azure ties.

OpenAI has become a public benefit corporation, giving Microsoft a 27% stake and long-term access to research methods

The deal removes a major constraint on raising capital for OpenAI, which was founded as a nonprofit AI safety group.

Microsoft and OpenAI announced the long-awaited details of their new partnership agreement Tuesday morning — with concessions on both sides that keep the companies aligned but not in lockstep as they move into their next phases of AI development.

The nonprofit arm, now called the OpenAI Foundation, will have a $130 billion stake in the for-profit enterprise.

Microsoft lifted a funding restriction on OpenAI that became a point of conflict after ChatGPT took off required more computing power.

With a new OpenAI partnership in hand, Microsoft is going into its earnings report Wednesday afternoon with a resolution to one of the biggest questions about its business.

Microsoft CEO Satya Nadella faced pushback even from the company’s cofounder and original CEO Bill Gates, he recalled during an interview on tech-focused YouTube channel TPBN. “Remember this was a nonprofit, and I think Bill [Gates] even said, ‘Yeah, you’re going to burn this billion dollars,'” Nadella said.

OpenAI said it has reorganized its ownership structure and converted its business into a public benefit corporation.

The memos mostly rehash what the company reports publicly, but often they show what developments the executive deems most important.