Microsoft reportedly lacks the know-how to fully leverage OpenAI’s tech — despite holding IP rights

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Over the last several months, there appears to have developed a substantial divide in the relationship between Microsoft and OpenAI, which was previously a high-profile, multi-billion dollar partnership. While OpenAI’s CEO, Sam Altman, downplayed the rumored tension as something typical in deep collaborations, it seems this once legendary tech friendship is growing increasingly strained day by day.

Kicking off the new year, OpenAI unveiled their monumental $500 billion Stargate initiative, aiming to establish data centers nationwide for their AI progress. This announcement sent shockwaves through the tech sphere, with leaders like Salesforce CEO Marc Benioff speculating that Microsoft might steer clear of OpenAI’s technology in the future.

In the days that followed, OpenAI took away Microsoft’s exclusive status as a cloud partner. Yet, Microsoft’s significant $13 billion investment in ChatGPT’s parent company ensures they have the opportunity to be the primary choice for hosting OpenAI projects on their cloud platform. If Microsoft doesn’t satisfy the necessary criteria and thresholds, however, they can delegate these tasks to other companies.

Lately, one report suggests that Microsoft withdrew from two large data center projects due to reluctance to contribute towards further ChatGPT training. Contrastingly, Sam Altman stated that OpenAI is no longer limited by computational resources.

It’s noteworthy that Satya Nadella, Microsoft’s CEO, expressed the company’s significant involvement in OpenAI’s prosperity. Moreover, he mentioned that they derive financial benefits from each instance of ChatGPT being utilized.

The situation became more intricate when OpenAI declared its intention to shift into a profit-driven organization, aiming to attract investment funds to meet escalating cloud computing expenses and additional requirements. This development follows increased investor demands, such as SoftBank, who played a significant role in securing $40 billion for OpenAI’s recent funding round, boosting its market value beyond $300 billion.

Instead, OpenAI needs Microsoft’s approval to transition into a profit-making entity. It appears that Microsoft may be hesitant due to its desire to safeguard its own strategic advantages.

As an enthusiast, I find myself on the edge of my seat, eagerly anticipating updates about ChatGPT’s evolution. The creators are under immense pressure to meet deadlines, as failing to do so might jeopardize their investor backing, including SoftBank’s crucial contribution. Interestingly, it seems that Microsoft is eyeing a significant stake in the new Public Benefit Corporation (PBC) that ChatGPT’s maker is establishing. However, OpenAI appears to be less than thrilled with Microsoft’s ambitious demands, as they seem somewhat excessive for their liking.

It’s possible that OpenAI might take legal action against Microsoft due to allegedly anticompetitive practices, preventing a transition. Yet, Microsoft has publicly declared that they are prepared to step away from the high-stakes negotiations regarding their profit-driven partnership with OpenAI. This implies that if no new agreement is reached, they will continue abiding by their existing contract with OpenAI, which remains valid until 2030.

The Microsoft-OpenAI partnership agreement is blurred at best

It’s been suggested that OpenAI might consider revising certain aspects of its partnership contract with Microsoft, which could involve relaxing restrictions on its intellectual property (IP) and advanced technology.

Following the revelation of OpenAI’s intent to buy Windsurf (a notable AI coding tool) for approximately $3 billion – its most significant acquisition yet – potential issues regarding anticompetitive practices arise due to Microsoft’s offering of GitHub Copilot, a service that directly competes with Windsurf. This could lead to concerns over the access OpenAI might gain to its intellectual property, including Windsurf.

Yet, Microsoft consents to the takeover of Windsurf and is prepared to exclude its intellectual property from the fresh collaboration contract, as reported by Business Insider. It appears that Windsurf’s CEO, Varun Mohan, prefers to keep Microsoft away from the company’s technological resources.

In other locations, OpenAI might accelerate its separation from Microsoft by deploying an AI programming agent that surpasses the skills of a highly skilled human programmer ahead of schedule.

Artificial General Intelligence, often heard in technological circles these days, refers to an advanced AI system surpassing human abilities, as suggested by a leaked partnership agreement between Microsoft and OpenAI. This system, if developed successfully, could potentially yield profits of up to $100 billion.

At present, Microsoft retains the unique ability to access and market OpenAI’s advanced technology through their Azure platform. However, insiders familiar with the multi-billion-dollar partnership mention that the intellectual property rights of OpenAI aren’t clearly defined in terms of specific product details or user interface information.

OpenAI is not required to reveal its works-in-progress until they are completed. It can sometimes be tricky to determine when a product has fully matured.

You might want to postpone sharing your idea with Microsoft until the last minute, allowing them to concurrently reveal it, yet making it challenging for others to replicate and develop a similar product based on it.

It’s worth noting that just because Microsoft has access to OpenAI’s intellectual property doesn’t automatically imply they understand how to implement it. This is due to OpenAI’s claim that Microsoft frequently seeks guidance to explain the technology to their employees. Reports suggest that Microsoft struggles to determine what questions to pose to OpenAI.

OpenAI is facing an attack following Mark Zuckerberg’s announcement of Meta’s new Superintelligence Labs, which he established alongside former Scale AI CEO, Alexandr Wang. Meta, the company behind Facebook, has successfully penetrated OpenAI and persuaded a significant number of their AI experts to join forces with lucrative $100 million signing incentives and first-year compensation packages.

Recently, the AI company has required its staff to take a compulsory one-week break, following accusations that they were working over 80 hours per week. This move is part of their strategy to face the intense competition in the AI industry.

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2025-07-03 12:39