(Reuters) – Microsoft and OpenAI reached a deal to allow the ChatGPT maker to restructure itself into a public benefit corporation, valuing OpenAI at $500 billion and giving it more freedom in its business operations.
The deal removes a major constraint on raising capital for OpenAI that existed since 2019, when it signed a deal with Microsoft that gave the tech giant rights over much of OpenAI’s work in exchange for costly cloud computing services. As its ChatGPT service exploded in popularity, those limitations became a notable source of tension between the two companies.
Here are reactions from analysts and investors:
PATRICE MESNIER, FOUNDING PARTNER AT OLDENBURG CAPITAL PARTNERS, LUXEMBOURG
“Transforming OpenAI into a public benefit corporation brings a clearer legal balance between social mission and profit goals, allowing the company to attract investors without losing its original purpose.”
“For Microsoft, this confirms that AI is now the center of its growth model, not a supporting technology. It is putting down all its chips to bet on AI’s future. Microsoft’s $135 billion stake epitomizes how extreme the concentration of money in AI has become. As recent eye-watering transactions show, we are still in a moment where strategic power matters more than valuation logic.”
SEENA REJAL, CHIEF COMMERCIAL OFFICER, NETMIND.AI, LONDON
“OpenAI’s restructuring shows that remaining independent is unattainable when operating frontier AI at scale. When you need $250 billion in cloud services, the relationship with your compute provider becomes structural rather than transactional. In a week where the Magnificent Seven will double down on AI as a growth strategy in earnings calls, this is a commanding step forward for Microsoft.”
“However, as Big Tech increasingly spreads its influence over those developing AGI, with Microsoft gaining access to all models until 2032, it raises questions about whether even more capital is being concentrated in the same few companies.”
RAIMO LENSCHOW, ANALYST, BARCLAYS, NEW YORK
“We see Microsoft shares acting better again. The new OpenAI agreement creates a solid framework for years to come and removes an overhang that has pressured shares in recent months. We hope that solid earnings tomorrow will be the next driver to put Microsoft back on investors’ radar.”
“Although Microsoft will lose its right of first refusal as a compute provider, we view the large service commitment (from OpenAI) as a significant positive for the company’s cloud business.”
DAN MORGAN, PORTFOLIO MANAGER, SYNOVUS TRUST, ATLANTA
“This is very important as it clarifies the relationship between Microsoft and OpenAI, and creates a path to profitability for OpenAI. As of the first half of 2025, OpenAI generated $4.3 billion in revenue but also reported a significant net loss of $13.5 billion.”
MICHAEL ASHLEY SCHULMAN, CHIEF INVESTMENT OFFICER, RUNNING POINT CAPITAL
“The right of first refusal on compute goes away, which sounds like Microsoft letting the golden goose date other clouds, yet OpenAI simultaneously commits to purchase about $250 billion of Azure (services).”
MATT BRITZMAN, SENIOR EQUITY ANALYST, HARGREAVES LANSDOWN, GREATER BRISTOL AREA, UK
“For OpenAI, the shift to a public benefit corporation is essential – not only to raise much-needed capital amid its aggressive deal-making, but also to satisfy investor conditions tied to governance changes. Overall, the move provides clarity and sets the stage for both players to scale their strategies with greater confidence.”
“This agreement is also a positive for Microsoft, as it removes uncertainty around revenue sharing, advanced AI milestones and product boundaries, while keeping the partnership aligned.”
CHRIS BEAUCHAMP, CHIEF MARKET ANALYST, IG GROUP, UNITED KINGDOM
“The timing looks right: AI is finally entering the deployment phase from pure hype. But the risks are real. Governance is messy, with the non-profit foundation retaining oversight, which could complicate decisions when profit and mission get into conflict.”
“Regulatory scrutiny is inevitable given Microsoft’s dominance, and the valuation assumes OpenAI will keep growing at breakneck speed. Any slowdown and this looks expensive.”
ZEUS KERRAVALA, PRINCIPAL ANALYST, ZK RESEARCH, BOSTON, MASSACHUSETTS
“The deal allowing OpenAI to use other cloud providers fundamentally redefines the structure of the AI industry by ending Microsoft Azure’s compute exclusivity and making the AI race a multi-cloud infrastructure war. This is good for all involved. OpenAI’s cloud diversification is a necessary strategic move driven by two factors: an insatiable demand for computing power and a pursuit of operational independence.”
ADAM SARHAN, CEO, 50 PARK INVESTMENTS, NEW YORK
“The deal marks a turning point for both Microsoft and OpenAI, as the restructuring into a public benefit corporation provides OpenAI with a more stable governance structure and greater flexibility for long-term growth.”
“While this move clears most of the major regulatory and governance hurdles that surfaced earlier this year, it does not mean all challenges are behind them. OpenAI still faces ongoing scrutiny around transparency, data usage, and safety oversight. But overall, this structure should provide a clearer path forward for innovation and accountability.”
GIL LURIA, HEAD OF TECHNOLOGY RESEARCH, DA DAVIDSON, PORTLAND, OREGON
“The restructuring of OpenAI and its deal with Microsoft is an important milestone for the company’s move forward towards AGI. It resolves the longstanding issue of OpenAI being organized as a not-for-profit (organization) and settles the ownership rights of the technology vis-à-vis Microsoft. The new structure should provide more clarity on OpenAI’s investment path, thus facilitating further fundraising.”
(Reporting by Akash Sriram, Arnav Mishra, Jaspreet Singh, Harshita Mary Varghese, Avinash P, Deborah Sophia, Arpan Daniel Varghese and Kanchana Chakravarthy in Bengaluru; Editing by Shinjini Ganguli)
