<div id="readability-page-1"><div><div>When Bill Gates cautioned Satya Nadella that Microsoft Corporation's (NASDAQ:MSFT) $1 billion OpenAI investment could go up in flames, few could have imagined it would turn into a $135 billion stake.<h2>From Lighting Money On Fire To A $135 Billion Win</h2>Microsoft shares climbed nearly 2% Tuesday after the company unveiled a new chapter in its partnership with OpenAI, converting its stake into a 27% ownership in OpenAI Group Public Benefit Corporation valued at roughly $135 billion.The move cements Microsoft's status as OpenAI's frontier model partner, with exclusive rights to its intellectual property and Azure API until artificial general intelligence is independently verified.Following the announcement, Nadella spoke about the partnership and how it didn't start with confidence. During an appearance on The TBPN Show, Nadella recalled a blunt remark from Microsoft co-founder Gates.&#34;I think you know Bill even said ‘you’re going to burn this billion dollars,'&#34; Nadella recalled, adding, &#34;We kind of had a little bit of high risk tolerance.&#34;<h2>How Microsoft's Partnership With OpenAI Evolved</h2>Nadella said his relationship with OpenAI CEO Sam Altman dates back to 2016, when OpenAI first began using Microsoft's Azure cloud. &#34;I think Elon [Musk] sent me the email asking for Azure credits,&#34; Nadella noted. &#34;That's how it got started.&#34;The collaboration gained momentum in 2019 when Altman approached Microsoft about scaling AI research. He said that the tech giant has always been obsessed with natural language since the early days of Microsoft Research.&#34;When Sam said ‘hey we’re going to go take a run you ought to be on it' that’s sort of what led to really coming together on this,&#34; Nadella said.<h2>Microsoft Extends AI Leadership Ahead of Earnings</h2>Under the new deal, OpenAI has committed to purchasing an additional $250 billion in Azure cloud services, while Microsoft's intellectual property rights have been extended through 2032.With its next earnings report due Oct. 29, analysts like Bank of America's Brad Sills expect Microsoft to continue expanding AI infrastructure through a strategic and measured approach — prioritizing scalable growth and energy self-reliance.Benzinga's Edge Stock Rankings place MSFT in the 97th percentile for Growth, underscoring its solid long-term fundamentals and strong investor confidence. Click here to see how it compares with its peers.<ul> <li>After Google’s $2.7B Acquisition Of Founders And Staff, This AI Startup Abandons Large Language Model Plans And Shifts Focus Away From Chatbots</li> </ul>Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.Photo courtesy: Alexandros Michailidis / Shutterstock.com </div></div></div>

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Bill Gates warned Satya Nadella about Microsoft's $1 billion investment in OpenAI, but it has turned into a $135 billion stake. Microsoft now owns 27% of OpenAI Group Public Benefit Corporation, solidifying its partnership with exclusive rights to its intellectual property. The collaboration began in 2016 and has evolved significantly, with OpenAI committing to purchase $250 billion in Azure services. Analysts expect Microsoft to continue expanding its AI infrastructure strategically, with strong investor confidence reflected in its high growth ranking.

- Microsoft Corporation's investment in OpenAI has transformed from a $1 billion risk into a $135 billion stake, solidifying its partnership with exclusive rights to OpenAI's intellectual property.  
- CEO Satya Nadella reflected on the initial skepticism from co-founder Bill Gates, who warned that the investment could fail, but the collaboration has since evolved significantly since its inception in 2016.  
- The new agreement includes OpenAI committing to purchase an additional $250 billion in Azure services, further enhancing Microsoft's leadership in AI ahead of its upcoming earnings report.  

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Bill Gates Told Satya Nadella 'You're Going To Burn This Billion Dollars' By Investing In OpenAI — But Microsoft's Bet Became A 100-Bagger