When Microsoft and OpenAI announced a new deal last Thursday, it looked like Microsoft was giving up some ownership but getting exactly what it wanted. They reduced Microsoft’s stake in OpenAI from 32.5% to 27%, but the overall setup still favors Microsoft heavily. Many experts say Microsoft basically won all the key arguments, except one area that doesn’t seem to matter much to them.

The deal also involves OpenAI becoming a public benefit corporation and going through a recapitalization. This means the ownership change is part of a bigger restructuring. OpenAI’s valuation is now pegged at around $135 billion, despite losing about $7.8 billion in just the first half of 2025. Critics argue that the valuation seems wildly inflated, especially considering how much OpenAI is burning through in costs. One analyst pointed out that 27% of nothing is still nothing, implying the valuation might be more hype than reality.

The revised agreement also pushes OpenAI to spend another $250 billion on Azure cloud services. Industry insiders are skeptical about this figure, describing it as “venture capital math”—basically, a big number made up to look impressive. OpenAI’s heavy spending is mostly driven by investors betting that someone else will pay more later, rather than from actual revenue or profit. This suggests a lot of the money is speculative, not based on solid business fundamentals.

Overall, most experts agree that the deal overwhelmingly favors Microsoft. One analyst said Microsoft had all the negotiation cards and came out ahead. But there’s one area where Microsoft isn’t a clear winner: artificial general intelligence, or AGI. That’s the kind of AI that can think and learn like a human. Microsoft seems to care little about AGI, and the deal reflects that.

The agreement mentions AGI as a milestone, but it’s vague. It says that once OpenAI declares AGI, an independent panel will verify it. But there are no specifics about who will choose these experts, how they will be qualified, or how long the process might take. Both OpenAI and Microsoft declined to clarify these points. Moreover, if Microsoft uses OpenAI’s intellectual property to develop AGI before it’s declared, the models will have to meet certain, unspecified compute thresholds that are much larger than current systems.

The deal also states that Microsoft’s rights to its models and related IP will last until at least 2032, and possibly longer if AGI is declared earlier. Microsoft keeps rights to certain types of data and model architecture, which they say are essential for their own research and development. But they explicitly retain control over key parts of the AI’s underlying technology.

Analysts note that a lot of attention is being paid to AGI, even though it’s still very uncertain if or when it will be achieved. Some experts believe that the whole focus on AGI might be more hype than substance. The timeline for reaching AGI could be just a few years or more than a decade away, and many other big players like Google, Meta, and Chinese tech giants are racing toward similar goals. The consensus among insiders is that neither Microsoft nor OpenAI appears to see AGI as an immediate goal.

Many critics see the AGI part of the deal as vague and possibly just corporate theater. Questions about who will define AGI, how it will be verified, and who will be qualified to do so remain unanswered. Some say it’s like a “Turing test 2.0,” with committees deciding when AGI is achieved, but with no clear standards or transparency.

The deal also includes some loosening of restrictions. OpenAI can now work with third parties more easily, develop products that are exclusive to Azure, and even serve US government national security clients on any cloud platform. Microsoft will no longer have a right of first refusal to be OpenAI’s compute provider, giving OpenAI more freedom.

Looking ahead, industry analysts see signs that Microsoft and OpenAI might be heading toward more independence. One expert suggested that these revisions are just the start of a gradual separation. Industry rumors also point to an AI bubble that may be close to bursting. As funding dries up and investor enthusiasm wanes, AI companies could be forced to raise prices sharply or face collapse. Right now, many AI services are heavily subsidized, but that won’t last forever.

In the end, most industry watchers believe this deal isn’t likely to change how enterprise IT leaders approach AI. The adjustments are mostly about setting the stage for future developments rather than delivering immediate, game-changing technology. Microsoft’s focus remains on controlling the AI infrastructure and IP, while AGI remains a distant and uncertain horizon.

Inspired by

• https://www.computerworld.com/article/4080690/the-revised-microsoft-openai-deal-teases-far-more-than-it-delivers.html

Sources

• gmpg.org
• microsoft.com
• networkworld.com
• infotech.com
• forrester.com