Microsoft could walk away from OpenAI relationship over equity structure: report

Microsoft (NASDAQ:MSFT) could walk away from its relationship with ChatGPT maker OpenAI as it looks to become a for-profit entity, the Financial Times reported.

The Windows maker has discussed halting discussions with OpenAI unless they can agree on important issues, including Microsoft’s stake in OpenAI, the news outlet added, citing people with knowledge of its plans. The talks have mentioned stakes as low as 20% and as high as 49%, the news outlet added.

If this were to occur, Microsoft would keep its contract with OpenAI to use its technology until 2030, unless an equal or better offer was presented, the people added.

The parties are also discussing revisiting a wider deal that saw Microsoft invest $1B into OpenAI in 2019.

Microsoft and OpenAI did not immediately respond to a request for comment from Seeking Alpha.

However, the companies issued a joint statement and said, “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.”

Microsoft made a “multi-billion” dollar investment into OpenAI in January 2023. Since then, OpenAI has worked to transform itself into a for-profit entity. In May, OpenAI said the non-profit entity that controls OpenAI will retain control after it switches to a for-profit company, following criticism from a number of parties.

OpenAI was founded in 2015 by a number of individuals, including CEO Sam Altman and Elon Musk, as a non-profit AI research organization. In 2019, the company added OpenAI Global LLC as a for-profit subsidiary.

Musk is currently suing the company for putting profit over humanity.