OpenAI and Microsoft Finalize $100 Billion Restructuring Deal Amid Legal Challenges

OpenAI has reached a non-binding memorandum of understanding with Microsoft to restructure its corporate organization, marking a significant shift in how the artificial intelligence company operates. Under the new agreement, OpenAI's nonprofit entity will secure a $100 billion equity stake in its for-profit subsidiary, which will transition to a public benefit corporation structure.

The restructuring, first proposed in May 2025, allows OpenAI to attract necessary capital while maintaining its nonprofit mission. CEO Sam Altman emphasized that "OpenAI was founded as a nonprofit, is today a nonprofit that oversees and controls the for-profit, and going forward will remain a nonprofit that oversees and controls the for-profit. That will not change."

Microsoft, which has been OpenAI's primary partner since 2019 investing billions and providing computing infrastructure, will continue as the company's key partner. The new terms specify that once Artificial General Intelligence (AGI) is achieved, OpenAI's nonprofit board will have authority to limit Microsoft's ability to commercialize that technology.

The deal faces regulatory scrutiny from California Attorney General Rob Bonta, who has expressed concerns about the restructuring's implications for charitable assets. Additionally, co-founder Elon Musk has filed a lawsuit claiming OpenAI is deviating from its nonprofit goals. The company must work with California and Delaware attorneys general to finalize the arrangement.

This restructuring comes approximately one month after OpenAI raised $8.3 billion to reach a $300 billion valuation, with the company expected to generate $12.7 billion in total revenue for 2025.