OpenAI, the artificial intelligence research company best known for creating ChatGPT, has just taken a dramatic step forward in its quest to develop artificial general intelligence (AGI)—the elusive form of AI that could one day surpass human intelligence. In a series of announcements over the past week, OpenAI unveiled a sweeping restructuring of its corporate framework and a deepening of its partnership with Microsoft, moves that signal both companies are doubling down on the race to reach AGI first.
The new arrangement, unveiled on October 28, 2025, transforms OpenAI’s for-profit arm into a public benefit corporation (PBC) called OpenAI Group PBC. This restructuring grants Microsoft a 27% equity stake in the newly formed entity, valued at a staggering $135 billion. According to Smart Money, Microsoft’s total investment in OpenAI has now reached $135 billion—up from the $1 billion it first committed in 2019 and the $13-14 billion it had poured in over the years since. The nonprofit OpenAI Foundation remains in control of the for-profit PBC, ensuring the company’s core mission—developing AGI for the benefit of all humanity—remains at the forefront.
But the restructuring is about more than just new titles and shifting ownership. It removes long-standing limitations on OpenAI’s ability to raise capital, a restriction that had been baked into the original 2019 partnership with Microsoft. Those early terms granted Microsoft broad rights to OpenAI’s research in exchange for the immense cloud computing resources necessary for AI development. However, the meteoric rise of ChatGPT in the past three years strained those arrangements and made clear that OpenAI would need even more resources—and flexibility—to stay ahead in the AI arms race.
Microsoft CEO Satya Nadella recently reflected on how the partnership began. In an interview with TBPN, Nadella recalled that even Microsoft’s legendary co-founder Bill Gates was skeptical about the initial $1 billion investment. “I think you know Bill even said ‘you're going to burn this billion dollars,’” Nadella remembered. But Nadella and his team saw the potential. “We kind of had a little bit of high risk tolerance, and we said we want to go and give this a shot.”
That gamble has paid off handsomely. Microsoft’s stock has surged nearly 21.72% over the past six months, according to Benzinga, and the company now holds a powerful position as OpenAI’s exclusive frontier model partner. The new agreement not only cements Microsoft’s rights to OpenAI’s intellectual property and Azure API access until AGI is achieved, but also extends those rights through 2032—even covering models developed after AGI is declared, provided appropriate safety guardrails are in place. Microsoft can also independently pursue AGI, either alone or in partnership with third parties, further underscoring the company’s central role in the next phase of AI development.
For OpenAI, the restructuring is a game changer. The company lost about $11.5 billion in the recent quarter alone, with Microsoft absorbing $3.1 billion of that loss in its own net income. Such eye-watering sums highlight just how expensive AGI research has become. The new PBC structure, however, gives OpenAI the freedom to scale like the world’s biggest tech giants, unlocking the potential for massive infrastructure investments and long-term funding. As part of the latest agreement, OpenAI has committed to an additional $250 billion in Azure cloud purchases, a staggering figure that reflects the scale of the company’s ambitions.
OpenAI CEO Sam Altman has been vocal about the importance of Microsoft’s support. In a joint appearance on the Big2Pod podcast with Nadella, Altman said, “Certainly without Microsoft, and particularly Satya's early conviction, we would not have been able to do this. I don’t think there were a lot of other people that would have been willing to take that kind of a bet given what the world looked like at the time.” He described the partnership as “one of the great tech partnerships ever,” built on vision and trust.
Of course, the road to AGI is not just about investment and infrastructure. The new provisions in the Microsoft-OpenAI partnership stipulate that any declaration of AGI by OpenAI must be verified by an independent expert panel, introducing a layer of accountability that could help address the fears and uncertainties surrounding superhuman AI. This safeguard aims to reassure both the public and the industry that AGI, when it arrives, will be recognized and managed responsibly.
Meanwhile, OpenAI is also laying the groundwork for an initial public offering (IPO) as soon as the second half of 2026. Chief Financial Officer Sarah Friar confirmed that the restructuring was part of positioning the company for a public listing, with some analysts speculating that OpenAI’s valuation could reach as high as $1 trillion. Such a figure would place OpenAI among the most valuable companies ever to go public, reflecting both the excitement and the high stakes surrounding AGI.
It’s not just Microsoft that’s betting big on OpenAI’s future. On November 2, 2025, OpenAI and Oracle announced plans to build a 1GW data center campus in Saline Township, Michigan. The so-called Stargate Project, set to break ground in early 2026, is expected to create over 2,500 construction jobs and further bolster the infrastructure needed for next-generation AI research. The scale of the project highlights just how much raw computing power—and real-world investment—is required to push the boundaries of artificial intelligence.
Behind all these deals and announcements is a growing sense that AGI might be closer than many once thought. Experts cited by Smart Money believe that AGI could arrive as soon as next year, a prospect that has investors, technologists, and policymakers alike watching closely. With Microsoft’s exclusive rights, OpenAI’s revamped structure, and new mega-projects like Stargate on the horizon, the race to AGI is heating up—with implications that could reshape not just the tech industry, but society as a whole.
As the dust settles on this week’s whirlwind of news, one thing is clear: OpenAI and Microsoft have positioned themselves at the very center of the AI revolution. Their partnership, forged in risk and vision, is now backed by unprecedented resources and a clear mandate—to push the boundaries of what machines can do, while ensuring those advances benefit all of humanity. The world will be watching as the next chapter unfolds.
