Microsoft could ditch OpenAI’s high-stake for-profit talks: “Holding out is Microsoft’s nuclear option, and they are just making OpenAI sweat”

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It appears that Microsoft‘s alliance with OpenAI is showing signs of strain, with rumors suggesting that Microsoft may be hindering OpenAI’s transformation into a profit-driven company. This supposed resistance is based on concerns about anticompetitive practices and an insistence on a significant stake in OpenAI’s Public Benefit Corporation (PBC) operations.

It appears that the tech titan may be preparing to abandon all talks with OpenAI completely, according to The Financial Times. This move might suggest that they’ve been unable to find a mutually beneficial agreement on key points in their negotiations.

If Microsoft chooses this path, it would need to maintain its collaboration with OpenAI until their agreement expires in 2030. This means that Microsoft will keep receiving early access to the creators of ChatGPT’s cutting-edge AI technology. In return, it provides OpenAI with computational resources and finances for further technological advancements.

In contrast, individuals closely tied to Microsoft have disclosed that the company is acting sincerely, aiming to finalize an agreement with OpenAI that benefits both parties financially.

A source with strong ties to Microsoft stated that the tech behemoth feels content with its existing agreement and is willing to weather the storm until 2030. This individual further explained that the financial market prioritizes Microsoft’s earnings, not its equity in OpenAI. They added that this partnership shifts revenue from Microsoft, making it a more financially significant move for the company.

If OpenAI’s plans come to fruition, Microsoft might no longer have the authority to sell OpenAI’s technology and the income generated from it. In a recent statement, Microsoft CEO Satya Nadella expressed, “‘Each day that ChatGPT thrives is an amazing day for Microsoft.’” He also disclosed that the company earns profits with every use of ChatGPT.

Microsoft and OpenAI have clashed over computational resources, with OpenAI expressing concerns that the amount of computational power they are given does not satisfy their requirements. Sam Altman, CEO of OpenAI, suggested that Microsoft’s limited computational power could cause them to lag behind competitors in the race for Artificial General Intelligence (AGI).

In other locations, it appears that Microsoft has backed out of two large data center agreements as they were unwilling to aid in further training for ChatGPT models. However, Sam Altman asserted that OpenAI is no longer facing limitations in computational resources.

After revealing its $500 Stargate initiative, aimed at meeting its computing requirements nationwide, OpenAI, OpenAI announced this project. Subsequently, notable tech figures like Salesforce CEO Marc Benioff speculated that Microsoft might not adopt OpenAI’s technology in the future.

From my perspective as an analyst, it appears that the insights shared by Benioff could very well be valid. Microsoft’s AI Chief Executive Officer, Mustafa Suleyman, has disclosed their work on pioneering AI models, yet he acknowledged a delay of 3 to 6 months compared to OpenAI. Interestingly, Microsoft has commenced trials with third-party AI models within Copilot, following reports suggesting that GPT-4 might be too costly and slow to cater to consumer demands effectively.

It’s not just the IP rights….it’s everything

It appears that tensions are escalating in the multi-billion-dollar collaboration between Microsoft and OpenAI. Recent news indicates that the disagreement stems from Microsoft’s hesitance to approve OpenAI’s transformation into a profit-driven company.

It’s clear that Microsoft is prioritizing its own interests significantly, given its $13 billion investment, making it OpenAI’s biggest backer. However, this position could shift following SoftBank’s growing alliance with the ChatGPT developer, which has been instrumental in their recent funding round. This strategic move has catapulted OpenAI’s market value to an impressive $300 billion.

The report implies that Microsoft might be slowing down OpenAI’s transformation into a Public Benefit Corporation, as they desire a larger share in OpenAI than the company is currently offering.

It appears that the creators of ChatGPT are considering modifying certain aspects of their partnership with Microsoft, particularly regarding Microsoft’s extensive rights to their intellectual property. Under this deal, Microsoft is authorized to market access to OpenAI’s models and can potentially receive up to 20% of the company’s earnings from these sales.

Since the AI company expressed its intention to buy Windsurf, a coding tool that uses AI, for $3 billion, this move has raised concerns about potential competitive issues that might arise with Microsoft’s GitHub Copilot in the long run.

According to a source closely connected to OpenAI, it’s being suggested that Microsoft is delaying OpenAI’s transformation into a profit-driven company in order to preserve its competitive edge over competitors such as Google and Meta in the AI field. The source further stated, “Microsoft is playing a waiting game… they are simply putting pressure on OpenAI.

By the year’s end, OpenAI is expected to transform into a profit-driven organization, however, if it fails to find an agreement with Microsoft, it risks losing the substantial investments made by its backers and potentially becoming vulnerable to unwanted acquisitions that could cost it billions.

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2025-06-19 03:39