Microsoft will now own a 27% stake in OpenAI through a new definitive agreement announced on Tuesday. The change comes after OpenAI reorganized itself into a for-profit company called OpenAI Group Public Benefit Corporation (PBC), with the nonprofit OpenAI Foundation retaining equity valued at nearly $130 billion, according to board chair Bret Taylor. Microsoft’s investment in the newly formed entity is valued at about $135 billion. Before the restructuring and additional funding, the company’s share in OpenAI’s for-profit business was 32.5%.

This updated agreement maintains the core of their collaboration, giving Microsoft continued exclusive access to OpenAI’s technology and Azure integration until OpenAI achieves Artificial General Intelligence (AGI), which it defines as AI exceeding human intelligence. However, several intellectual property, product development, and commercial terms have been revised. Microsoft will keep IP rights to OpenAI’s models and products until 2032, including certain rights even after AGI is developed if safety criteria are satisfied. Any declaration of AGI by OpenAI will be subject to confirmation by an independent panel of experts.

Microsoft will retain specific research-related IP access until 2030 or until AGI is officially confirmed, whichever comes first, but that access will no longer cover model architecture, weights, inference or fine-tuning code, or data-center technologies. It also no longer includes rights to OpenAI’s consumer hardware.

Under the restructured partnership, OpenAI gains more freedom to work with other companies on products delivered through APIs and standalone offerings. API-based products built with outside partners must still run exclusively on Microsoft’s Azure cloud, while non-API products can operate on any cloud platform. Microsoft will also be able to pursue AGI independently or with different collaborators. If it develops AGI using OpenAI’s IP before AGI is officially declared, the new systems must stay within defined compute limits, which are far higher than those used for today’s leading models.

OpenAI has additionally agreed to purchase $250 billion more in Azure cloud services, although Microsoft will no longer benefit from its previous right of first refusal as the preferred compute provider. The updated arrangement strengthens the long-term relationship between the companies while allowing both more flexibility as they progress toward AGI.