OpenAI and Microsoft renegotiate partnership amid IPO ambitions
The two companies are quietly redrawing the lines of their $13 billion relationship.
OpenAI wants to go public. Microsoft wants to keep its edge. What began as a close, strategic partnership between two tech powerhouses has become a complex negotiation over control, profit, and the future of artificial intelligence.
The two companies are reportedly in advanced talks to restructure their multibillion-dollar partnership, a move that could clear the path for OpenAI’s potential IPO while preserving Microsoft’s access to the startup’s most powerful AI models. The renegotiation comes as OpenAI seeks to shift its business into a Public Benefit Corporation (PBC), a structure that allows it to pursue profits while maintaining a social mission.
Microsoft, which has invested more than $13 billion and holds a 49% stake in OpenAI’s for-profit arm. According to the Financial Times, a critical sticking point is how much equity Microsoft will retain in the new structure in exchange for its $13 billion-plus investment.
Acquah Nana Yeboah
The original deal, struck in 2019 when Microsoft’s investment was still a modest $1 billion, gave it exclusive rights to integrate OpenAI’s technology into its products and cloud platform through 2030. Now, as OpenAI builds toward the next generation of its models and explores new infrastructure partnerships with companies like Oracle and SoftBank, that agreement looks increasingly outdated. According to Reuters, citing people familiar with the talks, Microsoft may give up part of its equity in exchange for extended access to OpenAI’s intellectual property beyond the current cutoff.
This renegotiation reveals the growing tension between two entities whose ambitions are starting to overlap. OpenAI, once reliant on Microsoft for funding and compute, is now pursuing its own infrastructure projects and enterprise clients. Microsoft, meanwhile, has integrated OpenAI’s models across its software suite and continues to provide massive computing power through Azure. But as OpenAI moves to assert its independence, friction is emerging. Still, both sides are motivated to reach a deal.
Louis Eriakha
OpenAI has raised over $40 billion and is nearing a $300 billion valuation, funding levels that don’t align with its original capped-profit model. The PBC structure, already used by Anthropic and xAI, offers a way to meet investor expectations while maintaining some public-purpose framework.
Not everyone is on board. Elon Musk, a co-founder who later left the company, is suing to block the restructuring. His lawyers argue OpenAI is handing over its mission to private interests. CEO Sam Altman insists the nonprofit board will stay in control, but critics say the founding principles are being diluted.
Microsoft’s stake could yield returns in the hundreds of billions if projections are correct. But the bigger story is how this reshaped alliance could define who leads—and owns—the next era of AI.
Louis Eriakha
