OpenAI's transition away from Microsoft's (MSFT) influence has unfolded swiftly.

Given ChatGPT's global impact—integrating into mobile devices, user cognition, and (often controversial) workplace applications—it’s easy to assume OpenAI already ranks among tech giants. However, Tuesday’s (October 28) new agreement with Microsoft formally marks a turning point: OpenAI’s next chapter will enable broader collaborations, positioning the AI "rising star" closer to joining—and potentially leading—the tech titan club.

Following the deal, OpenAI (ticker: OPAI.PVT) CEO Sam Altman unveiled ambitious AI development plans, including a $1.4 trillion investment to build 30 gigawatts (GW) of computing capacity.

This profit-driven partnership, like others in the AI boom, has drawn investor enthusiasm for its growth potential. Mutually beneficial terms aim to accelerate revenue growth for both parties. Now valued at $500 billion, OpenAI’s shift from a nonprofit structure grants flexibility in funding, talent acquisition, and strategic focus.

Microsoft, having earned roughly 10x returns on prior OpenAI investments, will hold a 27% stake in the newly formed public benefit corporation. The deal also secures a $250 billion Azure cloud services commitment and extends Microsoft’s intellectual property rights to OpenAI’s models until 2032.

Yet the agreement’s significance runs deeper. By restructuring as a traditional for-profit entity, OpenAI removes a major financing hurdle and paves the way for a potential IPO.

Previously, Microsoft was among the most vocal opponents of OpenAI’s profit-driven pivot. Other critics, notably Elon Musk (whose rival AI firm xAI is suing OpenAI and Apple over alleged anti-competitive App Store practices), lamented OpenAI’s departure from its nonprofit mission.

But in the high-stakes AI race among tech giants, nonprofit status is untenable. Microsoft’s objections have dissolved, likely due to the lucrative partnership’s momentum—one both sides seem keen to sustain.

Historically, OpenAI relied on Microsoft’s Azure cloud platform, while Microsoft funneled billions into OpenAI. The software giant’s stock surged on AI hype, leveraging first-mover advantage to outpace rivals like Amazon (AMZN) and Alphabet (GOOG).

This market dynamic isn’t new: Microsoft shares rose nearly 4% post-deal. Recent weeks saw "OpenAI boosts" for partners including Wal-Mart (WMT), Advanced Micro Devices (AMD), Broadcom (AVGO), and NVIDIA (NVDA).

Even before restructuring, OpenAI had become a central, "too-big-to-fail" node in the AI ecosystem through intertwined funding and partnerships. While becoming for-profit isn’t an endgame—nor a guarantee of irreplaceability—it undeniably fuels OpenAI’s next phase of growth.