June 19 - Microsoft (MSFT, Financial) may step back from discussions over its stake in OpenAI as talks around a restructuring deal stall. The tech firm has reportedly hit an impasse over the terms of its future equity in the AI startup if OpenAI shifts to a for-profit model.
The potential shift is seen as key for OpenAI to unlock funding from its most recent round. Without the change, early backers like SoftBank could reduce their commitments. The Japanese investor may trim its planned $30 billion investment by as much as $10 billion if the restructuring doesn't move forward. Microsoft must approve the conversion before year-end to avoid a funding setback.
Microsoft has poured over $13 billion into OpenAI since 2019. It currently holds rights to sell OpenAI's tools through Azure and receives 20% of the firm's revenue. Reports suggest the company is unwilling to relinquish these terms. OpenAI, meanwhile, is weighing legal action, accusing Microsoft of potentially anticompetitive behavior.
The fallout comes as OpenAI also faces challenges securing regulatory approval for the restructuring, along with a separate lawsuit filed by Elon Musk to block the conversion.
Despite tensions, both companies said they remain in discussions and hope to continue working together, according to a joint statement.
