Microsoft Considers Exiting OpenAI Negotiations Amid Tensions Over AI Partnership’s Future

Microsoft is considering walking away from high-stakes negotiations with OpenAI concerning their $13 billion partnership, as both companies struggle to reach agreement on crucial terms. Microsoft is willing to maintain its existing contract, which grants exclusive access to OpenAI’s models until 2030, rather than accept less favorable terms. OpenAI, transitioning from a nonprofit to a for-profit entity, seeks Microsoft’s consent to secure billions in funding, critical for its IPO, but faces friction over equity stakes and revenue shares. Proposed reductions to Microsoft’s revenue share—down to 10%—have exacerbated tensions, as Microsoft aims to retain its existing contractual advantages. Both companies publicly maintain optimism about their future collaboration, but pressures, including impending investment requirements, complicate negotiations. If an agreement isn’t made by the end of 2025, OpenAI risks losing significant investments. Legal and regulatory challenges further complicate the landscape, especially regarding the conversion from nonprofit to for-profit status.

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