Microsoft and OpenAI new deal values OpenAI at $500B (www.nbcnews.com)

Microsoft and OpenAI struck a recapitalization deal that restructures OpenAI into a public benefit corporation valued at $500 billion, with the OpenAI Foundation (a nonprofit) controlling the for-profit group. Microsoft will retain a roughly 27% stake (~$135 billion) after investing $13.8 billion — an implied ~10x return — and its shares rose ~2.5% as the company’s market cap topped $4 trillion. The agreement removes long-standing limits from the 2019 pact that constrained OpenAI’s ability to raise outside capital and secure third‑party compute, while preserving deep commercial ties: OpenAI commits to purchase $250 billion of Azure cloud services, Microsoft keeps certain rights to OpenAI models and products through at least 2032, and an independent panel must verify any claims that OpenAI has achieved AGI. For the AI community this clarifies ownership, funding and deployment pathways for one of the field’s most influential labs. The recapitalization opens major new fundraising options and reduces vendor-rights friction (Microsoft relinquished first‑refusal for compute and any hardware rights), but keeps heavy Microsoft cloud dependency and long-term licensing arrangements. The independent AGI verification mechanism, nonprofit oversight and public-benefit status aim to strengthen accountability and safety governance, while the massive Azure commitment and clarified IP terms reshape competitive dynamics for cloud providers, model access, and future commercialization of advanced AI.