Microsoft May Walk Away from Negotiations with OpenAI: Financial Times

OpenAI and Microsoft have had the most successful alliance in tech history, but it appears the relationship is lately going through growing tensions. After The Wall Street Journal reported on Monday that OpenAI considered accusing Microsoft of anticompetitive behavior and bringing the matter to regulators, Microsoft has fired back by saying that it may exit talks with OpenAI.

According to the Financial Times, Microsoft could walk away from negotiations with OpenAI if the AI startup doesn’t agree to Microsoft’s larger equity stake in OpenAI. Microsoft is pushing to keep the current commercial agreement until 2030, according to people familiar with the matter.

As OpenAI is planning to convert its for-profit LLC into a Public Benefit Corporation (PBC), Microsoft wants a larger stake in the company. Without Microsoft’s approval, OpenAI can’t complete the transition, which will prevent OpenAI from raising more funds. OpenAI has to complete the transition by the year’s end.

We reported earlier that OpenAI considered an antitrust complaint against Microsoft and mulled federal regulatory review of the terms of the contract. According to The Information, OpenAI is willing to offer a 33% stake in the company, but Microsoft is seeking a larger stake.

Not to mention, OpenAI also wants Microsoft to end the Azure exclusivity agreement and seeks to exempt the tech giant from accessing Windsurf’s IP rights.

In response to the WSJ’s report, both companies responded in a joint statement: “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.“