OpenAI negotiating with Microsoft for new billion-dollar deal

As the ChatGPT creator prepares for a potential initial public offering (IPO), OpenAI and Microsoft are renegotiating their multibillion-dollar partnership, seeking to redefine the terms of their strategic alliance. The talks will center around how much equity Microsoft will retain in OpenAI’s for-profit entity in return for its substantial investment, which has exceeded $13 billion since 2019. The renegotiation is expected to address ownership rights, and the roadmap beyond their current agreement, which runs through 2030.

The report asserts that Microsoft is open to reducing its equity stake in exchange for continued access to any next-generation technologies OpenAI develops after the cutoff year.

The renegotiation also includes revisions to broader contractual agreements originally set when Microsoft invested its first $1 billion into OpenAI. That deal helped cement Microsoft’s role as both a financial backer and strategic infrastructure partner, providing cloud computing power via its Azure platform.

Meanwhile, a separate report last week stated that OpenAI has privately told investors it plans to reduce the share of revenue it distributes to Microsoft under the current arrangement. This move is part of broader restructuring efforts aimed at ensuring the AI research lab’s long-term independence and viability ahead of a possible IPO.