Microsoft-OpenAI Partnership Updates AGI Clause and Licensing Terms
Review the updated AGI clause and licensing terms to understand future IP rights.
Document the new licensing terms and update internal policy documents.
Summary
In 2019 Microsoft became the preferred partner for licensing OpenAI’s pre‑AGI technologies, with the AGI clause originally tied to a $100 billion profit threshold. In December 2024 the agreement was revised to use an independent expert panel to declare AGI, removing the profit‑based trigger. By October 2025 the panel became the sole verifier, and Microsoft’s exclusive IP rights were capped at 2030 or the first AGI declaration, whichever came first. On February 27 2026 a joint statement confirmed the definition of AGI remained unchanged but effectively ended the clause. On April 27 2026 OpenAI announced Microsoft will hold a non‑exclusive license to OpenAI IP through 2032, will no longer pay revenue share, and that revenue share from OpenAI to Microsoft will continue through 2030 independent of technology progress, capped. The partnership still retains Azure API exclusivity until AGI is declared.
Key changes
- AGI declared by independent expert panel instead of $100B profit threshold
- Microsoft retains exclusive IP rights until AGI or 2030, whichever first
- Microsoft license to OpenAI IP becomes non‑exclusive through 2032
- Microsoft no longer pays revenue share to OpenAI
- Revenue share from OpenAI to Microsoft continues through 2030, independent of tech progress, capped
- Azure API exclusivity remains until AGI is declared