Microsoft is engaged in challenging negotiations with OpenAI, its largest partner and a major recipient of its investment, according to recent reports. The discussions are centered around OpenAI’s restructuring plans, where the startup announced it intends to transform its primary commercial division into a for-profit public benefit entity, while still maintaining control under its nonprofit board.
Microsoft, having invested approximately $13 billion in OpenAI, is said to be holding out approval on the new arrangements due to uncertainties around equity distribution. The central issue revolves around the amount of stake Microsoft will hold in the revised business structure. Sources familiar with the negotiations indicated Microsoft has proposed exchanging part of its equity share for extended rights to OpenAI’s technologies which are anticipated to be developed after the current collaboration’s planned conclusion in 2030.
Additionally, insiders noted that the dialogue is further complicated by increasing competitive tensions between Microsoft and OpenAI, stemming from OpenAI’s growing enterprise operations and ambitious projects such as the expansive Stargate infrastructure initiative. Both developments signify OpenAI’s shift from partner-dependent development into a more autonomous and competitive grand-scale strategy, intensifying friction in its partnership with Microsoft.
