OpenAI-Microsoft Partnership Faces Strain Amid Anticompetitive Concerns

The cracks in the OpenAI-Microsoft relationship are reportedly widening | TechCrunch

OpenAI and Microsoft may be reaching an inflection point in their relationship, according to a report from the Wall Street Journal. The report, citing anonymous sources, says OpenAI executives have considered publicly accusing Microsoft of anticompetitive behavior throughout their partnership. OpenAI executives also mulled whether to seek a federal regulatory review of their contract with Microsoft. OpenAI is trying to loosen Microsoft's grip on its intellectual property and computing resources, but the startup also needs the tech giant's approval to complete its for-profit conversion. The two companies are in a standoff over OpenAI's $3 billion acquisition of the AI coding startup, Windsurf. OpenAI doesn't want Microsoft to get Windsurf's intellectual property -- which could enhance the cloud provider's own AI coding tool, GitHub Copilot -- according to the report. While Microsoft was once a major accelerant to OpenAI's growth, the companies' relationship has grown tense. In recent months, OpenAI has reportedly tried to reduce its reliance on Microsoft for cloud services.

OpenAI executives have discussed accusing Microsoft of anticompetitive behavior: Report

Executives at OpenAI have discussed accusing the company's major backer, Microsoft, of anticompetitive behavior during their partnership, the Wall Street Journal reported on Monday, citing people familiar with the matter. OpenAI's effort could involve seeking a federal regulatory review of the terms of its contract with Microsoft for potential violations of antitrust law, as well as a public campaign, the report said. Such a move could unravel one of the most pivotal tech partnerships in the fast-growing field of artificial intelligence. OpenAI needs Microsoft's approval to complete its transition into a public-benefit corporation. But the two have not been able to agree on details even after months of negotiations, sources said. The companies are discussing revising the terms of Microsoft's investment, including the future equity stake it will hold in OpenAI, according to the sources. "Talks are ongoing and we are optimistic we will continue to build together for years to come," representatives for the two companies told the WSJ in a joint statement. They did not immediately respond to Reuters requests for comment. Microsoft invested $1 billion in OpenAI in 2019 to support the startup's development of AI technologies on its Azure cloud platform. The early bet gave it a front-row seat in the AI race and helped propel both companies to the forefront of the industry. Since then, however, OpenAI has been looking for ways to reduce its reliance on the tech heavyweight. The company plans to add Alphabet's Google Cloud service to meet its growing needs for computing capacity, Reuters reported earlier this month. Microsoft has also been laying the groundwork for greater independence. It has been working on adding internal and third-party AI models to power its flagship AI product, Microsoft 365 Copilot, which relies heavily on OpenAI, Reuters reported last year. Previous regulatory concerns have already prompted Microsoft to make concessions. Last year, it gave up its board observer seat at OpenAI to address antitrust scrutiny in the U.S. and the UK over its influence on the startup.

Report: OpenAI Executives Discussed Accusing Microsoft of Anticompetitive Behavior | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The tensions center in part on whether Microsoft would have access to the intellectual property of Windsurf, if OpenAI acquires that coding startup, and how big Microsoft's share of OpenAI would be if OpenAI converts into a public-benefit corporation, the Wall Street Journal (WSJ) reported Monday (June 16), citing unnamed sources. Asked about the report by the WSJ, the companies told the publication in a joint statement: "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." The reported dispute over the intellectual property of Windsurf came about because the agreement between the two companies provides Microsoft with access to all of OpenAI's intellectual property (IP), but because they have competing products for coding, OpenAI does not want Microsoft to have access to the IP of Windsurf, which OpenAI is acquiring for $3 billion, according to the report. In the case of OpenAI's planned conversion into a public-benefit corporation, Microsoft is reportedly asking for a larger stake in the new company that would result from that move than OpenAI is willing to give, the report said. The companies have reportedly also disagreed about whether OpenAI can partner with other cloud providers and whether Microsoft would still have access to OpenAI's technology after OpenAI says its models have achieved artificial general intelligence (AGI), per the report. It was reported in May that Microsoft and OpenAI were renegotiating their partnership deal to one in which the software giant would protect its equity stake while ensuring access to future technologies, and OpenAI gets more flexibility, with a possible initial public offering in its future. During that same month, it was reported that one of the key issues in these discussions was how much equity in a restructured OpenAI Microsoft would get in exchange for the $13 billion-plus it has invested in the startup.

ChatGPT owner OpenAI's partnership with Microsoft showing signs of...

Executives at OpenAI have discussed accusing the company's major backer, Microsoft, of anticompetitive behavior during their partnership, the Wall Street Journal reported on Monday, citing people familiar with the matter. OpenAI's effort could involve seeking a federal regulatory review of the terms of its contract with Microsoft for potential violations of antitrust law, as well as a public campaign, the report said. Such a move could unravel one of the most pivotal tech partnerships in the fast-growing field of artificial intelligence. Microsoft partnered with OpenAI in 2019, investing $1 billion to support the startup's development of AI technologies on its Azure cloud platform. The early bet gave Microsoft a front-row seat in the AI race and helped propel both companies to the forefront of the industry. Since then, however, OpenAI has been looking for ways to reduce its reliance on the tech heavyweight. The company plans to add Alphabet's Google Cloud service to meet its growing needs for computing capacity, Reuters reported earlier this month. Previous regulatory concerns have already prompted Microsoft to make concessions. Last year, it gave up its board observer seat at OpenAI to address antitrust scrutiny in the US and the UK over its influence on the startup. Spokespersons for OpenAI and Microsoft did not immediately respond to Reuters requests for comment.

OpenAI executives have discussed accusing Microsoft of anticompetitive behavior, WSJ reports

(Reuters) -Executives at OpenAI have discussed accusing the company's major backer, Microsoft, of anticompetitive behavior during their partnership, the Wall Street Journal reported on Monday, citing people familiar with the matter. OpenAI's effort could involve seeking a federal regulatory review of the terms of its contract with Microsoft for potential violations of antitrust law, as well as a public campaign, the report said. Such a move could unravel one of the most pivotal tech partnerships in the fast-growing field of artificial intelligence. Microsoft partnered with OpenAI in 2019, investing $1 billion to support the startup's development of AI technologies on its Azure cloud platform. The early bet gave Microsoft a front-row seat in the AI race and helped propel both companies to the forefront of the industry. Since then, however, OpenAI has been looking for ways to reduce its reliance on the tech heavyweight. The company plans to add Alphabet's Google Cloud service to meet its growing needs for computing capacity, Reuters reported earlier this month. Previous regulatory concerns have already prompted Microsoft to make concessions. Last year, it gave up its board observer seat at OpenAI to address antitrust scrutiny in the U.S. and the UK over its influence on the startup. Spokespersons for OpenAI and Microsoft did not immediately respond to Reuters requests for comment. (Reporting by Niket Nishant and Nathan Gomes in Bengaluru; Editing by Alan Barona)

OpenAI executives weigh antitrust accusation against Microsoft, WSJ reports

(Reuters) -OpenAI executives have considered accusing Microsoft, the company's major backer, of anticompetitive behavior in their partnership, the Wall Street Journal reported on Monday, citing people familiar with the matter. OpenAI's effort could involve seeking a federal regulatory review of the terms of its contract with Microsoft for potential violations of antitrust law, as well as a public campaign, the report said. Such a move could unravel one of the most pivotal tech partnerships in the fast-growing field of artificial intelligence. "Talks are ongoing and we are optimistic we will continue to build together for years to come," representatives for the two companies told the WSJ in a joint statement. OpenAI needs Microsoft's approval to complete its transition into a public-benefit corporation. But the two have not been able to agree on details even after months of negotiations, sources said. The companies are discussing revising the terms of Microsoft's investment, including the future equity stake it will hold in OpenAI, according to the sources. Separately, The Information reported that OpenAI wants Microsoft to hold a 33% stake in a restructured unit in exchange for foregoing rights to future profits, citing a person who spoke to OpenAI executives. The ChatGPT owner wants to modify existing clauses that gives Microsoft exclusive rights to host OpenAI models in its cloud, the report added. Microsoft has not agreed to OpenAI's proposed terms and is reportedly seeking additional concessions from the startup, according to The Information. Both companies did not comment on the reports from the WSJ and The Information. Microsoft invested $1 billion in OpenAI in 2019 to support the startup's development of AI technologies on its Azure cloud platform. Since then, however, OpenAI has been looking for ways to reduce its reliance on the tech heavyweight. The company plans to add Alphabet's Google Cloud service to meet its growing needs for computing capacity, Reuters reported earlier this month. (Reporting by Niket Nishant, Nathan Gomes and Gursimran Kaur in Bengaluru and Krystal Hu in New York; Editing by Alan Barona and Sherry Jacob-Phillips)