OpenAI’s restructuring plan, which would allow the company to eventually launch an initial public offering, will likely be delayed until at least early 2026 due to ongoing negotiations with its primary backer Microsoft (NASDAQ:MSFT), according to the Financial Times.
The ChatGPT-maker is currently in the process of reworking its existing contract with Microsoft, which runs through 2030, according to the report, citing people familiar with the issue. One of the key issues pertains to Microsoft’s access to OpenAI’s intellectual property. Will Microsoft be able to observe how new models are created, or will it just be able to use them in products?
Another area of debate is the artificial general intelligence, or AGI, clause. The clause allows OpenAI to limit Microsoft’s IP access once it achieves AGI, which is when an AI system possesses human-like and beyond cognitive abilities. According to the report, Microsoft CEO Satya Nadella wants to scrap this clause.
Another issue is cloud access. Microsoft Azure serves as the primary cloud provider and has exclusive rights to OpenAI’s application programming interface, or API, the report said. Apparently, OpenAI would like to pursue similar partnerships with providers such as Google Cloud (GOOG) and Amazon Web Services (AMZN).
The report said resolving these issues would also settle Microsoft’s stake in OpenAI once it goes public, which is expected to range from 30% to 35%.
“We have a long-term, productive partnership that has delivered amazing AI tools for everyone,” OpenAI and Microsoft said in a joint statement to Financial Times. “Talks are ongoing and we are optimistic we will continue to build together for years to come.”
It’s unclear how the ongoing negotiations will affect OpenAI’s relationship with Japan’s SoftBank (OTCPK:SFTBY)(OTCPK:SFTBF), which is another significant investor in the $300B startup. A portion of SoftBank’s $30B investment in OpenAI is contingent on the startup transitioning to an independent, for-profit company by year’s end.
Seeking Alpha reached out to OpenAI for clarification.