Microsoft Reduces OpenAI Dependency With In-House Frontier Models
Over the past several months, Microsoft and OpenAI quietly restructured the partnership that has helped define the recent AI boom, and the ripple effects will likely affect everyone from enterprise IT managers to casual ChatGPT users. To understand where things stand today, though, understand that this wasn't a single deal, but rather two separate disruptions spaced about six months apart.
The first big event happened in late October 2025, when OpenAI formally completed its conversion into a Public Benefit Corporation, or PBC. Since then OpenAI Group PBC has been functioning under a nonprofit parent called the OpenAI Foundation. Microsoft formalized its position at the time as a roughly 27% stakeholder, valued at approximately $135 billion, up from a total investment of around $13.8 billion dating back to 2019.
During this time, OpenAI also committed to purchasing $250 billion worth of Azure services, while Microsoft locked in IP licensing rights through...
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