Microsoft and OpenAI have announced a new deal enabling OpenAI, the creator of ChatGPT, to restructure itself as a public benefit corporation, valuing the AI pioneer at $500bn, and opening a way for it to be publicly traded.

The deal will also see Microsoft hold a 27% stake of OpenAI Group PBC, equal to about $135 billion. The company itself will be controlled by nonprofit OpenAI Foundation.

Microsoft and OpenAI will be will be tied in the deal until at least 2032, with Microsoft retaining some rights to OpenAI’s products and AI models until then, with Microsoft providing cloud computing facilities for the AI firm.

The new deal will open up OpenAI to opportunities for raising more capital. However, Microsoft’s previous deal with OpenAI had different stipulations dependent on OpenAI achieving artificial general intelligence. If OpenAI reaches this point, it would need to be verified by an independent panel, but Microsoft would maintain its stake regardless.

Microsoft saw its shared soar by 4% as the deal was announced.

“The nonprofit remains in control of the for-profit, and now has a direct path to major resources before AGI arrives,” the OpenAI Foundation’s board chair, Bret Taylor, said in a blog post.

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Further to this deal, OpenAI has also purchased $250 billion of Azure cloud computing services from Microsoft, for which Microsoft will no longer have the right to first refusal to provide cloud computing services to OpenAI.

While Microsoft will retain some rights to OpenAI’s software, it will not have any rights to the firm’s hardware.

The deal also allows OpenAI to jointly develop some products with third parties, and non-API products can be served on any cloud provider.

Microsoft will also be able to independently pursue AGI alone or in partnership with third parties.

With that, OpenAI is now restructured to be, at least partially, for-profit, and opened up to potential public trading.