Tensions Are Flaring Between Microsoft and OpenAI

Cracks are reportedly forming in the previously-solid relationship between OpenAI and Microsoft as the two companies renegotiate the terms of their partnership. According to new reporting from The Information and The Wall Street Journal, the two companies have been negotiating for more than eight months regarding issues of ownership, profit-sharing, and exclusivity. Here’s the context: OpenAI is attempting to convert from a non-profit into a for-profit public benefit corporation (also known as a B Corp). According to The Information, OpenAI wants Microsoft, by far its largest investor, to only have a 33 percent ownership stake in the company. The same report alleges that OpenAI also wants to alter terms that give Microsoft exclusive rights to resell OpenAI’s API in the cloud, and prevent Microsoft from getting access to AI code editor Windsurf, which OpenAI is currently in the process of acquiring. In 2019, years before the debut of ChatGPT, Microsoft invested $1 billion in OpenAI as part of a deal that gave the Bill Gates-founded company exclusive rights to resell OpenAI’s API in its Azure cloud computing platform. In total, Microsoft has invested over $13 billion in OpenAI. According to a January 2025 blog post, OpenAI and Microsoft’s contract will expire in 2030. Other cloud computing providers, like Google and Amazon, would likely jump at the chance to resell OpenAI’s popular models. The year 2030 is also when Microsoft will lose exclusive access to OpenAI’s IP, and according to The Information, Microsoft is looking to extend that period of exclusivity. Microsoft uses OpenAI’s tech to power many of its new and AI-upgraded products, and OpenAI’s models serve as linchpin for Copilot, Microsoft’s lineup of AI-powered personal and work assistants. In addition, OpenAI is reportedly looking to change the terms of its revenue-sharing deal with Microsoft. Under the current deal, OpenAI will share 20 percent of its revenue with Microsoft until 2030. Now, OpenAI is hoping to reduce that percentage. As for Windsurf, a platform that uses AI to assist software engineers, the Information reports that leaders at OpenAI are concerned that their relationship with Microsoft could complicate a planned $3 billion acquisition of the company. That’s because Microsoft also owns GitHub Copilot, a major competitor to Windsurf. According to the Journal, tensions between Microsoft and OpenAI have deepend to the point that OpenAI executives have discussed going to antitrust regulators with accusations that Microsoft has been engaging in anticompetitive behavior. However, OpenAI and Microsoft told The Information in a joint statement that “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.” BY BEN SHERRY @BENLUCASSHERRY