OpenAI Recapitalization Formalizes Microsoft Stake, $250B Azure Deal

OpenAI's recapitalization made it a public-benefit corporation and secured California Attorney General Rob Bonta's approval after CEO Sam Altman pledged the company would remain headquartered in California and would not threaten to leave if sued. The restructuring formalized Microsoft's reorganized 27% stake—reported to be worth about $135 billion after roughly $13 billion of investment following an initial $1 billion 2019 bet—and ended Microsoft's cloud exclusivity while locking in an agreement for OpenAI to buy up to $250 billion in Azure services. OpenAI accepted enforceable concessions, including continued oversight by the OpenAI Foundation and the California attorney general, commitments to prioritize safety and the proper use of charitable assets, and specific safeguards following reports of harmful interactions. The deal clears months of regulatory scrutiny and keeps OpenAI positioned for a future IPO, potentially as early as 2027, while cementing Microsoft's strategic role. The agreement balances the company's for-profit ambitions with public-benefit commitments and regulatory oversight.