OpenAI Vs. Microsoft? Inside The Brewing Power Struggle That Could Reportedly Explode Into An Antitrust Showdown

The relationship between OpenAI and Microsoft Corporation MSFT is becoming increasingly strained, with OpenAI reportedly contemplating a drastic move in the ongoing negotiations.

What Happened: OpenAI is exploring the option of accusing Microsoft of anticompetitive practices — a step that could potentially strain their long-standing partnership, reported The Wall Street Journal on Monday. This potential move might include requesting a federal regulatory review of their contract terms for possible antitrust violations, along with launching a public campaign,

The negotiations have entered a pivotal stage, with OpenAI reportedly aiming to reduce Microsoft’s influence over its AI products and access to computing resources, but Microsoft’s consent is pivotal for OpenAI’s transition into a for-profit entity, a change that could facilitate increased fundraising and a potential public listing.

OpenAI and MSFT did not immediately respond to Benzinga’s request for comment.

Why It Matters: Microsoft, once a key driver of OpenAI's early growth in return for priority access to its technology, has now emerged as a rival—adding complexity to ongoing negotiations. The two companies are also in disagreement over the stake Microsoft would hold if OpenAI transitions into a public-benefit corporation.

In May, OpenAI was reportedly in high-stakes negotiations with Microsoft to revise the terms of their multibillion-dollar partnership. A key point of contention was the amount of equity Microsoft would receive in the restructured OpenAI entity in exchange for its over $13 billion investment to date.

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OpenAI’s future as a for-profit company is also closely tied to its relationship with Microsoft. The company’s Texas data center expansion was seen as a move to reduce its dependence on Microsoft’s computing resources.

Later in June, Microsoft integrated OpenAI’s Sora model into its Bing app, bringing generative video tools to everyday users. This move came after Google’s Veo 3 video AI made headlines, highlighting the competitive landscape of the AI industry.

OpenAI’s potential transition into a public-benefit corporation and its IPO ambitions have been a focal point of the negotiations with Microsoft. The outcome of these discussions will shape the future of their partnership and the broader AI industry.

On a year-to-date basis, Microsoft stock surged 14.47%, according to data from Benzinga Pro.