OpenAI's new agreement with Microsoft gives the AI startup more freedom on its quest to raise billions (www.businessinsider.com)

OpenAI completed a long-expected corporate recapitalization, establishing the OpenAI Foundation (the nonprofit) as the overseer of a newly formalized public benefit corporation, OpenAI Group PBC. The Foundation holds equity in the for-profit now valued at roughly $130 billion and will receive additional ownership if valuation milestones are met. OpenAI says the move simplifies governance while preserving nonprofit control and creates a direct path to major resources ahead of AGI. At the same time it signed a new definitive agreement with Microsoft: Microsoft now owns a $135 billion stake in OpenAI Group PBC, equal to about 27% on an as‑converted diluted basis (down from a 32.5% position when excluding recent funding rounds). For the AI/ML community, the restructuring and Microsoft deal are significant because they materially change the economics and governance of one of the field’s leading labs. The recapitalization is explicitly designed to attract the substantial capital, talent, and cloud compute (Azure) required for large-scale model development and safety work, while the Foundation aims to keep mission and commercialization aligned. Practically, this deepens Microsoft’s strategic role, increases OpenAI’s runway for compute-intensive research, and raises the bar for funding models and governance expectations across the industry as labs race toward AGI.