Microsoft and OpenAI have resolved a long-standing dispute, lifting fundraising restrictions that had limited the AI company’s ability to raise capital since 2019. The agreement, announced just one day before Microsoft’s third-quarter earnings release, marks a pivotal moment in the two companies’ relationship and clears a major hurdle for OpenAI’s ambitious growth plans. In a recent episode of the "TPBN" podcast, Microsoft CEO Satya Nadella described himself as a “peacetime CEO” following the resolution, signaling a shift from tension to collaboration. Nadella emphasized that AI will remain a core driver of innovation and long-term value, stating, “I'm always focused on long-term return.” The original 2019 agreement granted Microsoft extensive rights to OpenAI’s technology in exchange for billions in cloud computing support. However, as OpenAI evolved—particularly after CEO Sam Altman’s brief ouster in late 2023—the structure created friction. The company restructured from a nonprofit into a for-profit entity called OpenAI Group PBC to operate more efficiently, while maintaining a nonprofit board to oversee its mission of ensuring artificial general intelligence (AGI) benefits humanity. Despite this shift, the prior deal restricted OpenAI’s ability to attract outside investment and secure independent computing contracts, creating a bottleneck as demand for AI infrastructure surged. With ChatGPT now serving around 800 million weekly users, the need for massive data center expansion became urgent. OpenAI has set a goal to build $500 billion worth of data centers over the next decade. The new agreement resolves these constraints, allowing OpenAI to raise funds from external investors and pursue strategic partnerships. The nonprofit parent will continue to govern the for-profit arm, ensuring alignment with OpenAI’s mission. Bret Taylor, Chair of the OpenAI Board, confirmed in a blog post that the company has completed its recapitalization, creating a clearer path to access major resources ahead of AGI. Under the revised terms, Altman will not receive equity in the new structure and will continue to earn his $76,000 annual salary. The company has not announced plans for an initial public offering. Microsoft will retain a 27% stake in OpenAI and maintain certain rights to its products and models through 2032. The resolution boosted Microsoft’s stock, which rose about 2% by market close on Tuesday. While neither company provided immediate comment, the deal is seen as a significant step toward enabling OpenAI to scale rapidly while maintaining its mission-driven foundation.