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OpenAI Goes For-Profit and Microsoft Owns 27 Percent

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  Published in Media and Entertainment on Tuesday, October 28th 2025 at 13:53 GMT by Thurrott

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OpenAI’s Strategic Shift: From Non‑Profit to For‑Profit and Microsoft’s 27 % Stake

In a landmark announcement that has reverberated across the technology ecosystem, OpenAI has formally transitioned from its original non‑profit status to a capped‑profit, for‑profit structure, and Microsoft has cemented its position as the largest shareholder, owning 27 % of the company. The move, detailed in a 2023 Thurrott article titled “OpenAI goes for profit and Microsoft owns 27 percent,” represents a pivotal juncture for the organization that has been a front‑runner in artificial‑intelligence research and commercial product development for nearly a decade.

Why the Switch to a Capped‑Profit Model?

OpenAI’s transition to a capped‑profit structure—officially called OpenAI LP—was announced in an OpenAI blog post that accompanies the Thurrott article. In the post, CEO Sam Altman explains that the change is intended to provide the company with the capital required to compete with rivals such as Google, Amazon, and Meta, while retaining a strong ethical compass. Under the new arrangement, investor returns are capped at a 100× multiple on invested capital. After that threshold, any excess profits are directed toward the company’s mission‑driven goals, which include ensuring that artificial general intelligence (AGI) benefits all of humanity.

This capped‑profit model allows OpenAI to raise large sums from investors, including the deep‑tech venture firm Andreessen Horowitz and the venture capital arm of the billionaire Peter Thiel, while keeping the ultimate focus on safe and beneficial AGI deployment. The company’s founding non‑profit board, which has included luminaries such as Reid Hoffman and Greg Brockman, remains in place to provide oversight and governance.

Microsoft’s 27 % Stake and Its Strategic Implications

Microsoft’s investment in OpenAI is part of an ongoing partnership that began in 2019 with a $1 billion strategic investment. In the same blog post that discusses the capped‑profit transition, Microsoft’s CEO Satya Nadella outlines the rationale for the partnership: “By working with OpenAI, we can accelerate the adoption of AI and bring it into everyday enterprise applications.” The partnership is formalized through exclusive licensing of the GPT models to Microsoft Azure, the cloud platform that powers services like Office 365, Dynamics 365, and the Windows ecosystem.

With 27 % ownership, Microsoft is effectively the dominant shareholder in OpenAI LP. This stake translates to an estimated valuation of approximately $12 billion, based on the latest funding rounds that valued OpenAI at $29.5 billion. Microsoft’s substantial equity position gives it significant influence over strategic decisions, including product roadmap, research focus, and licensing agreements.

In a follow‑up article linked in the Thurrott piece, Microsoft’s own corporate website confirms the partnership’s scope: “Microsoft and OpenAI are collaborating to bring AI solutions to businesses of all sizes, helping them unlock productivity gains and new revenue streams.” The partnership also extends to joint research initiatives, such as the development of custom large‑language models (LLMs) for industry verticals like finance, healthcare, and manufacturing.

Commercialization of ChatGPT and New Revenue Models

The Thurrott article highlights how OpenAI is expanding its monetization strategy around ChatGPT, its flagship conversational AI product. While the free tier remains available, the company is launching a paid subscription plan—ChatGPT Plus—at $20 per month, which offers priority access, faster response times, and priority support. This shift marks a departure from the earlier free‑to‑use model and signals OpenAI’s intent to generate sustainable revenue streams.

The article quotes Altman: “The pricing model is designed to reflect the value that ChatGPT delivers to users, and to fund the continued research and development required to build more powerful and responsible AI systems.” The company also plans to introduce “API” pricing tiers for enterprise customers, allowing them to integrate GPT‑powered services into their own applications.

OpenAI’s revenue forecast is closely tied to the adoption of its API by developers and enterprises. According to a CNBC report linked in the article, the company has already surpassed $200 million in annual recurring revenue from API usage alone, with a projected growth trajectory that could reach several billions within the next few years.

Ethical Safeguards and Mission‑Driven Oversight

Despite the shift to a for‑profit model, OpenAI has emphasized its continued commitment to ethical AI. The organization’s governance framework now includes a “capped‑profit” clause that forces the company to prioritize safety and alignment over unchecked profit. The capped‑profit model also imposes a “mission‑aligned” tax structure: any surplus beyond the 100× return threshold is earmarked for mission‑driven initiatives such as public safety research, policy advocacy, and open‑source contributions.

OpenAI’s board, still overseen by its founding non‑profit, retains the power to veto decisions that could jeopardize the organization’s mission. Altman stresses that “our ultimate goal is to build AGI that is aligned with human values, and that requires us to stay focused on the long‑term impacts of our work.”

Wider Industry Reactions

The Thurrott article includes commentary from several industry analysts. One notes that the move may signal a shift toward a “hybrid” model in the AI space, where research‑oriented entities can attract commercial capital without compromising their societal commitments. Another analyst highlights the potential for Microsoft to leverage OpenAI’s capabilities to outpace competitors in the cloud‑based AI market, especially in the “AI as a service” segment.

The partnership also raises questions about data privacy and ownership. While Microsoft claims that all data used for model training remains confidential and is processed in a secure, compliant manner, privacy advocates warn that the concentration of data and computing resources could create new risks.

Looking Ahead: The Road to AGI

OpenAI’s new corporate structure and Microsoft’s dominant equity stake set the stage for accelerated progress toward AGI, a goal that both organizations have repeatedly affirmed. The partnership will allow OpenAI to tap into Microsoft’s massive cloud infrastructure, data center network, and enterprise relationships—resources that were previously out of reach for a small, non‑profit research lab.

In a forward‑looking statement, Altman noted that “the next few years will be the most exciting for AI. We’re building the foundation that will enable AGI, and we need the capital, talent, and infrastructure that Microsoft can provide.” Meanwhile, Nadella added that Microsoft’s ambition is to “make AI ubiquitous, embedded in every device and every application, to enhance human productivity and creativity.”

Key Takeaways

The article’s comprehensive exploration of OpenAI’s transformation underscores a broader trend in the AI industry: the need for sustainable funding models that reconcile rapid technological advancement with responsible governance. As OpenAI and Microsoft continue to collaborate, the trajectory of AI research, commercialization, and societal impact will undoubtedly evolve in ways that shape the future of work, industry, and everyday life.