OpenAI and Microsoft are reportedly renegotiating the terms of their multibillion-dollar alliance, setting the stage for a potential initial public offering (IPO) by the ChatGPT creator. The talks are aimed at aligning their partnership with long-term strategic interests while preserving Microsoft’s access to cutting-edge AI developments.
Balancing Investment and Future Innovation
One of the central concerns in the discussions is determining how much equity Microsoft will retain in OpenAI’s restructured for-profit business.
With Microsoft’s total investment now exceeding $13 billion, the tech giant is seeking to maintain technological access even if it relinquishes part of its equity.
According to reports, Microsoft is open to reducing its ownership stake in exchange for a continued pipeline to AI models developed beyond 2030, a timeframe previously established as a cut-off in the existing deal.
Historic Investment Terms Being Revised
These high-stakes negotiations also involve changes to the original contractual framework dating back to 2019, when Microsoft first injected $1 billion into OpenAI.
That agreement laid the foundation for the deep integration between the two companies, which has seen Microsoft embed OpenAI technology across its product lines, including Azure and Microsoft 365.
Neither company has yet commented on the status or specifics of the renegotiations.
Revenue Share Model Under Scrutiny
As part of the restructuring, OpenAI has reportedly informed investors that it plans to share a smaller portion of future revenue with Microsoft.
This shift is seen as necessary to pave the way for the company’s new financial structure, which could be more appealing to future public investors if OpenAI proceeds with an IPO.
Strategic Shifts Beyond Microsoft
In a related move earlier this year, Microsoft revised some terms of its existing deal with OpenAI after joining forces with Oracle and Japan’s SoftBank Group to plan the development of massive AI data centers in the United States—an initiative expected to reach $500 billion in investment.
This broader strategy signals Microsoft’s growing ambitions in AI infrastructure, even beyond its exclusive collaboration with OpenAI.