Microsoft-OpenAI Partnership at Risk: Talks Facing Collapse

On June 19, Microsoft may halt negotiations regarding its stake in OpenAI as discussions stall over a potential restructuring deal. The impasse centers on future equity terms if OpenAI transitions to a for-profit model, which is crucial for securing new funding. Key investor SoftBank could reduce its planned $30 billion investment by $10 billion if the restructuring fails. Microsoft, which has invested over $13 billion in OpenAI since 2019 and holds rights to sell its tools through Azure, is reportedly reluctant to change its terms. Meanwhile, OpenAI is considering legal action against Microsoft, citing potential antitrust issues. Additionally, OpenAI is facing challenges in obtaining regulatory approval for the restructuring, compounded by a lawsuit from Elon Musk aimed at blocking this shift. Despite these tensions and obstacles, both companies expressed a desire to continue discussions and collaboration.

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