Microsoft-OpenAI Alliance in Trouble?
Rumors of a rift in the Microsoft-OpenAI partnership have been circulating for some time, and recent reports suggest that Microsoft may be prepared to walk away from the deal. According to a Financial Times report, citing sources familiar with the matter, Microsoft is considering abandoning its high-stakes negotiations with OpenAI due to disagreements over critical issues.
The main point of contention appears to be the size of Microsoft’s future stake in OpenAI. The two companies seem unable to agree on this and other key issues, despite ongoing talks. Microsoft plans to maintain the existing commercial contract until 2030, the report added.
In a joint statement on June 17, Microsoft and OpenAI dismissed rumors of a rift, saying, “We have a long-term, productive partnership that has delivered amazing AI tools for everyone. Talks are ongoing and we are optimistic we will continue to build together for years to come.”
However, tensions between the tech giants have been flaring, with OpenAI seeking to loosen Microsoft’s grip on its AI products and computing resources, according to a Wall Street Journal report. OpenAI is also seeking Microsoft’s approval to convert its operations to a for-profit model to raise funds and list publicly.
Recent talks have been fraught with disagreements, including OpenAI’s accusation that Microsoft has engaged in anticompetitive behavior, which could potentially involve federal regulators reviewing the contract terms. Another point of contention is OpenAI’s $3 billion acquisition of Windsurf, with Microsoft wanting to keep Windsurf’s IP restricted since it has access to all of OpenAI’s IP.
The Microsoft-OpenAI partnership, viewed as one of the most successful in tech history, may be on the verge of change as both sides potentially turn into competitors. The conversion to a for-profit model must be completed by the end of 2025 if OpenAI wants to secure around $20 billion in funding.
