Key Takeaways
- A restructured agreement grants Microsoft 20% of OpenAI’s revenue until 2032.
- Microsoft no longer holds exclusive compute provider rightsāOpenAI gained flexibility to use alternative providers.
- The tech giant now owns approximately 27% of OpenAI Group PBC, with the entity valued near $135 billion.
- Shares of MSFT have declined more than 25% since October peaks, currently trading around $397.24.
- The forward price-to-earnings ratio has reached 24x, marking the lowest level in almost three years.
Microsoft (MSFT) finds itself in an unusual position: shares are trading at their most attractive valuation in three years while the company quietly secured one of the tech sector’s most compelling long-term revenue arrangements.
Under a revised partnership structure, Microsoft will receive 20% of OpenAI’s entire revenue stream through the end of 2032āan extension from the initial 2030 deadline. This agreement was finalized during the fall months, with adjustments made to defer certain payment portions.
A significant modification: OpenAI gained autonomy to partner with additional compute infrastructure providers. Microsoft relinquished its priority access rights in this area.
Microsoft Claims 27% Ownership in Restructured OpenAI Entity
When OpenAI completed its transformation into a public benefit corporation structure this past October, Microsoft maintained its strategic position.
Through this corporate restructuring, Microsoft obtained a 27% ownership stake in the newly formed OpenAI Group PBC. Current valuations place this entity at approximately $135 billion.
Microsoft retained its exclusive intellectual property licensing and Azure API privilegesāarrangements that remain active until an independent committee verifies artificial general intelligence achievement.
OpenAI Pursues $40 Billion Capital Raise
OpenAI is currently seeking up to $40 billion in fresh capital to accelerate data center infrastructure expansion. Microsoft, Nvidia (NVDA), and Amazon (AMZN) are among the companies in discussions.
Negotiations are also underway with SoftBank and various Middle Eastern investment groups. The funding round is projected to finalize during the first quarter of 2026.
Meanwhile, MSFT shares have experienced significant pressure throughout 2026. The stock has retreated over 25% from October highs, settling at $397.24 on February 20āwithin a 52-week trading band of $344.79 to $555.45.
MSFT Trading at Most Attractive Valuation in Three Years
The stock price decline hasn’t coincided with fundamental business weakness. During the second quarter of fiscal 2026, which concluded December 31, Microsoft reported 17% revenue expansion compared to the prior year.
Shares currently command a 24x forward earnings multipleāthe most compressed valuation in nearly three years. By comparison, the S&P 500 trades at 21.9x, placing Microsoft just marginally above the broad market benchmark.
Azure’s growth trajectory remains intact, supported by a substantial pipeline of workloads awaiting deployment. Microsoft maintains a $2.9 trillion market capitalization, delivers a 68.59% gross margin, and offers shareholders a 1.09% dividend yield.
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