It’s no secret that a rift has been slowly forming between Microsoft and OpenAI’s multi-billion-dollar partnership, with executives like Salesforce CEO Marc Benioff claiming that Microsoft won’t use OpenAI’s technology and AI models in the future, after the latter unveiled its $500 billion Stargate project to bolster its cloud computing needs.
In an exclusive report by The Wall Street Journal (WSJ), tension between the two companies has seemingly continued to brew as the ChatGPT maker seeks to evolve into a for-profit venture. However, Microsoft is seemingly holding back from giving its thumb of approval as the transition may weigh heavily on its interests, including its rights to OpenAI‘s intellectual property.
OpenAI is betting on Microsoft’s approval to move forward with its for-profit transition, which will allow it to go public and raise money for its sophisticated AI advances. Microsoft’s delayed blessing has seemingly placed some of OpenAI’s executives over the fence, prompting them to accuse the tech giant of anticompetitive business practices.
According to the outlet, OpenAI’s anticompetitive accusations could lead to a federal regulatory review of the terms of the multi-billion-dollar partnership for potential violations of antitrust law.
In a joint statement from Microsoft and OpenAI:
“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.”
As you may know, OpenAI made its largest acquisition in April, buying Windsurf for $3 billion. The company is well-known for its agentic AI-powered coding tool, which competes with Microsoft’s GitHub Copilot on an even playing field.
Microsoft’s partnership with OpenAI grants it access to the ChatGPT maker’s IP, which includes Windsurf. However, sources with close affiliations with OpenAI claim that the company doesn’t want Microsoft to access Windsurf because it could potentially lead to anti-competitive practices.
OpenAI is on a tight leash to evolve into a for-profit entity by the end of this year, or it could run the risk of returning $20 billion raised through its latest round of funding and even a hostile takeover. Market experts predict that Microsoft could acquire OpenAI within the next 3 years.
It’s still unclear whether the two companies will reach common ground, as Microsoft is seeking a larger stake in OpenAI’s Public Benefit Corporation than OpenAI is willing to offer. If Microsoft eases its hold on the partnership, the ChatGPT maker could sell its technology through other cloud providers, expanding its customer base while also gaining access to more computing power for AI development.
Interestingly, a separate report revealed that Microsoft ditched two mega data center deals because it didn’t want to support additional ChatGPT training. However, OpenAI’s CEO Sam Altman claimed that the company was no longer compute-constrained.
However, Microsoft’s CEO Satya Nadella expressed his wish to continue working with OpenAI for decades. “Every day that ChatGPT succeeds is a fantastic day for Microsoft,” Nadella added. This is because Microsoft apparently still makes some money every time ChatGPT is used.