**Microsoft and OpenAI Resolve Major Dispute Ahead of Earnings Release**

Microsoft and OpenAI have resolved a significant dispute, addressing a lingering question just ahead of Microsoft’s earnings announcement on Wednesday.

On Tuesday’s episode of the “TPBN” podcast, hosts John Coogan and Jordi Hays spoke with Microsoft CEO Satya Nadella following the announcement. Nadella described himself as a “peacetime CEO,” reflecting the resolution of the dispute with OpenAI.

“I think AI and everything that it entails is going to be a core driver, and some of it’ll come from just this intelligence and this sort of continual march of capability,” Nadella said when asked about his expectations from the OpenAI agreement. “I’m always focused on long-term return.”

The two companies reached a deal to lift restrictions that had limited OpenAI’s ability to raise funds since 2019. That year, OpenAI granted Microsoft extensive rights to its work in exchange for billions in cloud computing power.

This landmark agreement was announced just one day before Microsoft’s third-quarter earnings release and call. It enables OpenAI, the maker of ChatGPT, to complete its transition from a nonprofit to a for-profit company. This shift grants CEO Sam Altman greater authority to strike new deals and steer the company as it embarks on an ambitious mission to build $500 billion worth of data centers over the next decade.

OpenAI initially started as a nonprofit organization but restructured following Altman’s brief ouster in late 2023. The company formed a new for-profit arm, OpenAI Group PBC, allowing it to operate more like a traditional company. While the for-profit entity handles day-to-day operations, the original nonprofit still governs the organization.

Under the original deal with Microsoft, OpenAI was constrained in its ability to raise funds from external investors and secure new computing contracts—even after its restructuring. This limitation sparked conflict between the two companies as ChatGPT’s user base skyrocketed, driving an urgent need for additional computing resources.

Today, OpenAI boasts approximately 800 million weekly ChatGPT users and is actively building a series of large data centers across the United States.

As part of the new deal, CEO Sam Altman will not receive equity in the reorganized structure nor any change to his $76,000 annual salary. Furthermore, the company has not announced any plans to go public. Microsoft will maintain its 27% stake in OpenAI and continue to hold specific rights to OpenAI’s products and AI models until 2032.

Most of Altman’s personal wealth comes from his role at Y Combinator and his early investments in notable companies such as Airbnb, Stripe, and Reddit.

Following the announcement, Microsoft shares rose approximately 2% in Tuesday’s market close.

“OpenAI has completed its recapitalization, simplifying its corporate structure,” Bret Taylor, Chair of the OpenAI Board of Directors, wrote in a blog post on Tuesday. “The nonprofit remains in control of the for-profit, and now has a direct path to major resources before AGI arrives.”

Both OpenAI and Microsoft have yet to respond to immediate requests for comment.
https://www.businessinsider.com/microsoft-resolves-major-dispute-with-openai-ahead-of-earnings-2025-10