Microsoft–OpenAI Strike $500B Valuation Deal, Including 27% Microsoft Stake and Long-Term Azure Contract

OpenAI has completed a restructuring that values the company at $500 billion and cements Microsoft as its anchor partner. The new setup lifts fundraising limits and clarifies governance at a time when model training, power, and silicon costs are rising fast—and when cloud capacity can decide who ships the next frontier model.

Microsoft and OpenAI signed a revised agreement enabling OpenAI to convert into a public-benefit corporation under a nonprofit foundation. Microsoft will hold ~27%, an equity mark of roughly $135 billion, after cumulative investments of $13.8 billion. The pact includes an additional $250 billion multi-year commitment for Azure usage, while Microsoft drops its prior right-of-first-refusal on new OpenAI offerings. The stock reaction pushed Microsoft’s market value above $4 trillion during Tuesday trading.

The structure—nonprofit oversight with a for-profit PBC—aims to balance safety and speed. It formalizes OpenAI’s dependence on Azure while leaving room for broader partnerships as AI infrastructure decentralizes beyond a single vendor. Analysts say the 27% stake plus the Azure pipeline de-risks Microsoft’s AI roadmap, while OpenAI gets cleaner access to private and (eventually) public capital. An independent panel will validate any AGI claims, and Microsoft retains rights to OpenAI models and products through 2032.

Expect a faster product cadence from OpenAI—backed by a capital and compute stack scaled to nine and eleven figures, respectively. For Microsoft, the combination of a ~$135B equity position and a $250B workload pipeline strengthens Azure’s flywheel and sets a higher bar for rivals contemplating their own multi-hundred-billion-dollar AI bets.