The deal removes a major constraint on raising capital for OpenAI, which was founded as a nonprofit AI safety group.

OpenAI established a for-profit arm valued at $500 billion Tuesday, doing so through a long-anticipated corporate restructure that provides Microsoft with a large stake in the new company as it looks to expand on its rapidly expanding artificial intelligence offerings.

OpenAI has since gone on a deal spree with a host of other major tech players leading to speculation that an AI bubble may be in the offing. The revised deal extends Microsoft's rights to OpenAI's AI models through to 2032 but excludes consumer hardware. OpenAI brought AI to the mainstream user in 2022 with the introduction of ChatGPT.

Microsoft and OpenAI announced a restructuring deal on Tuesday that frees the ChatGPT maker to move away from its nonprofit roots and likely go public so it can finance CEO Sam Altman's ambitious plans to develop data centers and cutting-edge technology.

The company assured state officials that it would stay in California as it continues its global expansion, which could include a public offering as soon as 2027.