OpenAI wants to loosen Microsoft's control over its AI products and computing resources, as well as secure the tech giant's consent to turn the organization into a profitable company. Without Microsoft's consent, OpenAI will not be able to raise additional investment and go public, The Wall Street Journal reports.
But the negotiations have proven so difficult that in recent weeks OpenAI executives have been discussing a "nuclear option": accusing Microsoft of anticompetitive behavior during the collaboration. According to people familiar with the situation, this could include asking federal antitrust authorities to review the terms of the contract for antitrust violations and launching a public campaign against Microsoft.
The move could end a six-year partnership that has been considered one of the most successful in the tech sector. For years, Microsoft supported OpenAI’s growth in exchange for early access to its technology, but now the two companies are competing with each other, making it difficult to find a compromise.
"We have a long-term, productive partnership that has delivered amazing AI tools for everyone," the companies said in a joint statement. "Talks are ongoing and we are optimistic we will continue to build together for years to come."
One of the main points of disagreement is the terms of OpenAI's $3 billion acquisition of AI coding startup Windsurf: Microsoft has access to all of OpenAI's intellectual property under an existing agreement, and Microsoft's own product, GitHub Copilot, competes with similar OpenAI solutions. OpenAI does not want Microsoft to have rights to Windsurf's intellectual property.
In addition, Microsoft is insisting on a larger stake in the new public company than OpenAI is willing to provide, while OpenAI seeks to limit Microsoft's stake in order to maintain independence and the ability to raise capital from other investors.
OpenAI must complete the transformation by the end of the year or risk losing $20 billion in funding.
Under the Biden administration, the U.S. Federal Trade Commission last year launched a broad antitrust investigation into Microsoft, including its investment in OpenAI. The regulator is examining whether Microsoft's exclusive rights to distribute and host OpenAI's technology restrict competition in the AI market.
In closed discussions, OpenAI executives are considering a formal challenge to Microsoft’s practices. "We believe that competition and openness are key to the future of AI," said one source close to OpenAI. "If Microsoft doesn’t agree to fair terms, we will have to take more drastic action."