Investor pressure on OpenAI to evolve into a for-profit venture feels like it's at an all-time high, which is seemingly pushing its multi-billion-dollar partnership with Microsoft to the wall. Reports suggest that Microsoft is holding back the transition while it negotiates favourable terms that will protect its best interests.
As it happens, OpenAI CEO Sam Altman has finally broken his silence on the matter, revealing on the New York Times podcast that he recently discussed the future of OpenAI's partnership on a call with Microsoft CEO Satya Nadella (via Reuters).
According to Sam Altman:
"Obviously in any deep partnership, there are points of tension and we certainly have those. But on the whole, it's been like really wonderfully good for both companies."
Naturally so, Microsoft is OpenAI's largest investor with a $14 billion stake in the business. As such, it stands as the most affected since OpenAI plans to renegotiate some of the terms included in its original partnership agreement with Microsoft, including IP rights that could warrant access to its $3 billion Windsurf acquisition.
OpenAI further deemed Microsoft's reluctance to approve its evolution as anticompetitive business practices and could be moving to court. Microsoft is reportedly demanding a lion's share of OpenAI's new Public Benefit Corporation (PBC), which is well above what the AI firm is willing to offer.
A person with close affiliations with Microsoft revealed that Microsoft was stalling OpenAI's transition to maintain a healthy lead in the AI race, ahead of rivals like Meta and Google:
"Holding out is Microsoft’s nuclear option . . . and they are just making OpenAI sweat."
However, Microsoft claimed that it is happy with its current contract with OpenAI and that it is willing to walk away from high-stakes, for-profit negotiations, riding out the rest of the partnership till 2030.
If the ChatGPT maker's efforts to evolve into a for-profit entity prove futile by the end of this year, it could be subjected to hostile takeovers and outsider interference. Not forgetting the liability to return the $20 billion raised by investors during its latest round of funding, which pushed its market capitalization to $300 billion.
In the grand scheme of things, Satya Nadella indicated that he is looking forward to partnering with OpenAI for decades, even beyond its existing partnership agreement. "Every day that ChatGPT succeeds is a fantastic day for Microsoft,” Nadella added. Microsoft apparently makes money from ChatGPT's broad adoption and usage.
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