Microsoft and OpenAI have reached a deal to allow the ChatGPT maker to restructure itself into a public-benefit corporation, valuing OpenAI at $500bn and giving it more freedom in its business operations.

The deal, unveiled on Tuesday, removes a major constraint on raising capital for OpenAI that has existed since 2019.

At the time, it had signed an agreement with Microsoft that gave the tech giant rights over much of OpenAI’s work in exchange for costly cloud computing services needed to carry it out. As its ChatGPT service exploded in popularity, those limitations had become a notable source of tension between the two companies.

Microsoft will still hold a stake of about $135bn, or 27 percent, in OpenAI Group PBC, which will be controlled by the OpenAI Foundation, a nonprofit, the com

See Full Page