The collaboration between Microsoft and OpenAI seems to be heading towards a disastrous end.
Tensions between Microsoft and OpenAI are running high. This is due to OpenAI’s desire to restructure into a for-profit organization. However, this requires approval from Microsoft, and the tech giant wants to secure more money first.
Failed Negotiations
According to The Information, OpenAI is willing to grant Microsoft a maximum of 33 percent of the new company on the condition that Microsoft relinquishes future profit claims. Microsoft, which has already invested $13.75 billion, finds this insufficient. The company wants guarantees that it will maintain access to OpenAI’s models in the future. OpenAI, in turn, is considering formally accusing Microsoft of anti-competitive behavior, which could lead to a legal investigation into possible cartel agreements, according to The Wall Street Journal.
Less Dependency
The relationship between the two parties has been strained for some time. Microsoft built GitHub Copilot, a direct competitor to OpenAI “’s code models, and collaborates with rivals such as Mistral AI, Inflection, and Meta. OpenAI”’s acquisition of the startup Windsurf for three billion dollars is now causing new friction: the company does not want to share that technology with Microsoft, despite contractual obligations.
At the same time, OpenAI wants to reduce its dependence on Microsoft as a cloud provider. The company is negotiating with Google Cloud, SoftBank, Oracle, and CoreWeave, and wants to set up its own data center project in Texas under the name Stargate. Altman is also trying to get rid of exclusivity clauses around Azure.
OpenAI Wants to Transition to a Public Company
In May, OpenAI announced that it wants to restructure into a public benefit corporation (PBC), similar to rivals like Anthropic. Elon Musk was not happy about this. The non-profit structure will be maintained as a supervisory body. This way, OpenAI aims to attract investors without losing its mission.
Regulators in California and Delaware are currently investigating whether the proposed structure is legally permissible, writes TechRepublic. Microsoft is already pushing for more legal protection for its investment.
The future of their alliance thus seems very uncertain. OpenAI wants to become more independent. Microsoft wants control. And that’s where the problem lies.