Is the partnership with Microsoft in jeopardy? Media reports that OpenAI is considering the "nuclear option" of filing antitrust charges

Media reports indicate that negotiations between OpenAI and Microsoft have reached an impasse, with their relationship on the brink of collapse.

OpenAI seeks to weaken Microsoft's control over its AI products and computing resources and is seeking Microsoft's approval for its transformation into a for-profit company. Whether Microsoft agrees to this transformation is key to OpenAI's ability to continue financing and ultimately go public.

However, according to informed sources who spoke to The Wall Street Journal, due to the stalled negotiations, OpenAI's senior management has recently even discussed the so-called "nuclear option": accusing Microsoft of anti-competitive behavior during the collaboration. This could include requesting federal regulators to review whether the contract terms violate antitrust laws, or even launching a public relations battle.

Analysts believe that if this move is made, it could threaten the six-year partnership between the two companies. This collaboration is regarded as one of the most successful partnerships in tech history. Over the years, Microsoft has provided funding for OpenAI's development and gained priority access to its technology, but now the two companies have become competitors in multiple areas, making negotiations increasingly difficult.

The joint statement from both companies on that day did not confirm this news. The statement indicated that the two companies have maintained a good partnership and are committed to providing advanced AI technology, and are still in negotiations, expressing confidence in future cooperation.

Disagreements over IP acquisition and OpenAI's transformation shareholding... the two companies have become competitors

According to informed sources, the two parties currently have disagreements over the terms of OpenAI's $3 billion acquisition of the code startup Windsurf. Under the existing agreement, Microsoft has access to all of OpenAI's intellectual property; however, OpenAI does not want Microsoft to access Windsurf's intellectual property, as Microsoft's own GitHub Copilot product directly competes with OpenAI.

The two sides are also in dispute over how much equity Microsoft should hold in the new entity if OpenAI transforms into a public benefit corporation. It is reported that the equity ratio proposed by Microsoft is higher than what OpenAI is willing to concede.

OpenAI must complete its transformation by the end of this year, or it risks losing $20 billion in financing.

Under the previous Biden administration, the U.S. Federal Trade Commission launched a broad antitrust investigation into Microsoft last year, also examining Microsoft's investment behavior in OpenAI, as part of a broader review of tech giants' investments in the AI sector.

Microsoft first invested $1 billion in OpenAI in 2019. Under the current contract, Microsoft exclusively owns the rights to sell OpenAI software tools through the Azure cloud platform and has priority access to OpenAI's technology. Microsoft has also been designated as OpenAI's sole computing resource provider, although last year Microsoft allowed OpenAI to establish its own data center project called Stargate.

Now, the two companies are competing across multiple products, ranging from consumer-facing chatbots to enterprise AI tools. Last year, Microsoft CEO Satya Nadella even recruited a competitor of OpenAI CEO Sam Altman, quietly launching Microsoft's own AI model development project OpenAI currently hopes to renegotiate existing agreements while advancing the company's structural transformation. The company wants to establish partnerships with other cloud service providers to sell technology to more customers and acquire more computing resources. Meanwhile, Microsoft hopes that even when OpenAI announces that its model has reached Artificial General Intelligence (AGI), and the existing partnership will terminate at that time, the company can still continue to use OpenAI's technology