Billionaire Sam Altman’s OpenAI and Microsoft are engaged in high-level negotiations to redefine the terms of their multibillion-dollar partnership, in a move that could clear the path for the artificial intelligence startup to go public while ensuring Microsoft retains priority access to advanced AI technologies, the Financial Times reported on Sunday.
At the center of the talks is a recalibration of Microsoft’s equity stake in OpenAI’s for-profit business, which was established alongside its nonprofit arm. The software giant has invested over $13 billion in OpenAI to date and may now give up a portion of its stake in exchange for extended access to next-generation AI models beyond a 2030 threshold, according to the report.
The companies are also reviewing the broader framework of their original partnership, forged in 2019 when Microsoft made a $1 billion initial investment. That agreement laid the groundwork for one of the most influential alliances in the tech sector powering Microsoft’s Azure cloud services and integrating OpenAI’s language models, including ChatGPT, across its product ecosystem.
While neither OpenAI nor Microsoft responded to requests for comment, sources familiar with the matter indicate that the outcome of these talks could significantly reshape the power dynamics in the AI industry.
The Information reported last week that OpenAI has already informed investors of plans to reduce the share of revenue it will allocate to Microsoft going forward, a move that signals the startup’s intent to assert more control over its financial future as it considers a public listing.
The latest developments also follow Microsoft’s recalibration of its AI strategy earlier this year. In January, Microsoft revised aspects of its agreement with OpenAI after launching a joint venture with Oracle and Japan’s SoftBank Group.
As OpenAI charts a course toward a potential IPO, the outcome of these negotiations could have far-reaching implications not just for the companies involved, but for the future architecture of the AI industry itself.