After eight months of negotiations with no clear resolution, The Information has shed light on the tense discussions between Microsoft and OpenAI regarding a potential restructuring. The talks, which began late last year, reveal a complex standoff with significant financial and strategic stakes for both parties.
Key Proposals and Disputes
OpenAI is pushing for a major shift, offering Microsoft approximately 33% equity in a restructured entity in exchange for relinquishing rights to future profits.
Additionally, OpenAI seeks to revise Microsoft’s exclusive cloud hosting rights for its models, aiming to diversify its infrastructure partnerships.
A critical point of contention is OpenAI’s planned $3 billion acquisition of AI startup Windsurf, which directly competes with Microsoft’s GitHub Copilot. OpenAI wants to exclude Windsurf from the current IP-sharing agreement, likely to protect its competitive edge, but Microsoft has yet to agree.
Microsoft, in turn, is holding firm, demanding further concessions. This includes extending its rights to OpenAI’s intellectual property, a move that could bolster its own AI offerings.
Under the existing deal, Microsoft is entitled to 20% of OpenAI’s revenue, potentially netting $35 billion by 2030 when OpenAI projects $174 billion in revenue.
It’s no surprise that OpenAI is eager to renegotiate these terms to retain more control over its growing profits.
The AGI Debate
Another flashpoint is the definition of Artificial General Intelligence (AGI). The current agreement allows Microsoft to claim a share of OpenAI’s revenue until AGI is achieved, at which point those rights would expire. Microsoft argues that AGI remains years away, while OpenAI’s leadership believes it could arrive much sooner, adding urgency to the negotiations.
The Pressure Mounts
OpenAI faces a critical deadline by year-end to finalize its restructuring. Failure to do so could jeopardize a $40 billion funding round, with lead investor Softbank potentially withdrawing its $20 billion commitment. This financial pressure underscores the high stakes, as OpenAI seeks to balance its mission-driven roots with commercial ambitions, while Microsoft aims to safeguard its substantial $13 billion investment.
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A Stalemate with Global Implications
As of 11:33 PM CEST on June 19, 2025, the lack of progress highlights a deepening rift between two AI giants. OpenAI’s push for independence clashes with Microsoft’s desire to maintain influence, raising questions about the future of their partnership. Whether this deadlock resolves with a compromise or escalates into a broader conflict, the outcome could reshape the AI landscape for years to come.
