Report: OpenAI May Raise the Antitrust Weapon Against its Partner Microsoft

The cloud and AI alliance between OpenAI and Microsoft may soon take an ugly turn as the two companies are increasingly becoming rivals. A new report from The Wall Street Journal yesterday revealed that OpenAI is considering making antitrust complaints to regulators to pressure Microsoft to change the terms of their strategic partnership.

Microsoft’s multi-billion-dollar investment in OpenAI helped the company to become an AI juggernaut, with ChatGPT crossing 500 million weekly users back in March. However, the AI startup is now worried about Microsoft’s equity in the company after it transitions into a public-benefit corporation. “Microsoft is currently asking for a larger stake in the new company than OpenAI is willing to give,” people familiar with the matter told the WSJ.

Microsoft’s approval of OpenAI’s conversion into a for-profit company will determine the startup’s capacity to raise money and eventually go public. However, the Redmond giant is reportedly making this transformation difficult at a time when OpenAI is planning to raise $40 billion via a new funding round led by SoftBank.

“The negotiations have been so difficult that in recent weeks, OpenAI’s executives have discussed what they view as a nuclear option: accusing Microsoft of anticompetitive behavior during their partnership,” people familiar with the situation told the WSJ. “That effort could involve seeking federal regulatory review of the terms of the contract for potential violations of antitrust law, as well as a public campaign,” the people said.

According to the report, OpenAI also doesn’t want Microsoft, which currently has access to all of OpenAI’s IP, to get its hands on the technology from Windsurf, an AI coding startup it just acquired for $3 billion. Microsoft already has its own AI coding tool with GitHub Copilot, which also competes with OpenAI’s new Codex AI agent.

The terms of Microsoft’s partnership with OpenAI currently give the Redmond giant the exclusive right to sell the company’s technology through its Azure platform, which is something the ChatGPT maker would also like to renegotiate. This is probably what could give some ground to OpenAI’s potential accusations of anticompetitive behaviour from Microsoft.

While it increasingly looks like Microsoft and OpenAI are at odds with each other, the two companies shared a reassuring joint statement to the WSJ. “We have a long-term, productive partnership that has delivered amazing AI tools for everyone. Talks are ongoing and we are optimistic we will continue to build together for years to come,” the statement said.