Microsoft and OpenAI have reached a landmark deal allowing OpenAI to restructure as a public benefit corporation, valuing the company at $500 billion.

The restructuring removes previous capital-raising constraints rooted in their 2019 agreement, which granted Microsoft extensive rights over OpenAI’s work in exchange for cloud services.

The big picture: Microsoft will maintain a 27% stake in the newly formed OpenAI Group PBC, valued at approximately $135 billion, controlled by the OpenAI Foundation, a nonprofit entity. • Since 2019, Microsoft has invested $13.8 billion in OpenAI; this deal implies nearly a 10-fold return on that investment. • Following the announcement, Microsoft’s shares rose 2.5%, pushing its market capitalization above $4 trillion once again.

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