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Tensions Rise as Microsoft Considers Ending OpenAI Negotiations

By  |  June 18, 2025

Microsoft is considering stepping back from ongoing negotiations with OpenAI as discussions over the future of their multibillion-dollar partnership reach a critical juncture, according to the Financial Times. The talks, centered on the AI company’s plan to shift from its non-profit origins to a for-profit model, have reportedly hit a wall over key points such as Microsoft’s future equity stake.

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    Insiders familiar with the matter told Financial Times that Microsoft may abandon the talks entirely if no agreement is reached. In that scenario, the tech giant would continue to rely on its current commercial arrangement, which secures access to OpenAI’s technology through 2030—unless a more favorable deal emerges. Microsoft has poured more than $13 billion into OpenAI to date and wants to protect its investment and maintain a competitive advantage in the AI sector.

    Despite the potential impasse, both companies remain engaged in near-daily discussions and appear to be negotiating in good faith. “We have a long-term, productive partnership that has delivered amazing AI tools for everyone,” the two firms said in a joint statement. “Talks are ongoing and we are optimistic we will continue to build together for years to come.”

    OpenAI’s move to restructure into a traditional for-profit entity is seen as vital for attracting additional investment and preparing for a possible public listing. But such a transformation requires Microsoft’s approval before the end of the year. Without it, OpenAI risks losing substantial funding from other backers, including SoftBank, per Financial Times.

    Related: Revised OpenAI Plan Doesn’t Deter Musk’s Lawsuit, Says Lawyer

    The heart of the standoff lies in how much ownership Microsoft should receive under a revamped corporate structure. Negotiations have reportedly seen Microsoft’s potential stake range between 20% and 49%. Additionally, the companies are reviewing the broader terms of their partnership, originally set in 2019 when Microsoft’s initial $1 billion investment gave it exclusive rights to sell OpenAI’s models and a 20% share of revenues up to $92 billion.

    Sources close to Microsoft indicated the company is unwilling to compromise on its current access to OpenAI’s intellectual property or its share of future revenues. “The status quo” remains acceptable for the software giant, one insider noted, adding that Microsoft is willing to operate under existing terms through the end of the decade.

    The negotiations have grown tense enough that, according to The Wall Street Journal, OpenAI has even considered accusing Microsoft of anti-competitive behavior as a pressure tactic. Meanwhile, a person close to OpenAI described Microsoft’s stance as a calculated move: “Holding out is Microsoft’s nuclear option… and they are just making OpenAI sweat.”

    With competitors like Google and Meta rapidly advancing in the AI arms race, both sides recognize the strategic importance of the partnership.

    Source: The Financial Times