Microsoft-OpenAI alliance in trouble? FT report says tech giant ...
Microsoft may halt negotiations with OpenAI due to disagreements over key issues, including the size of the Silicon Valley tech giant's future stake in the company, according to a report by the Financial Times.
Disagreements over Future Stake
Citing sources in the know, FT reported that Microsoft “is prepared to abandon its high-stakes negotiations” with OpenAI — its artificial intelligence (AI) partner of six years — if discussions with the ChatGPT maker remain stuck.
The two sides seem “unable to agree” on critical issues such as the size of Microsoft's future stake in OpenAI, and the giant plans to maintain the existing commercial contract till 2030, the FT report added.
Potential Rift and Denials
Microsoft and OpenAI did not immediately respond to queries, as per a Reuters report. Rumors have been swirling for some time now, and after reports on June 17, the companies in a joint statement, had dismissed any rift, stating: “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.”
Earlier, the Wall Street Journal in a report on June 17 noted that tensions between the tech companies were “flaring” as OpenAI seeks to “loosen Microsoft’s grip on its AI products and computing resources”.
Challenges in Negotiations
However, recent talks have been fraught with disagreements, with the sources telling WSJ that OpenAI has accused Microsoft of “anticompetitive behavior” — something that could get federal regulators involved in reviewing the terms of the contract for potential violations.
Another key point of contention stems from OpenAI's $3 billion acquisition of Windsurf. Since Microsoft has access to all of OpenAI's IP, which uses it to build its own GitHub Copilot, the latter wants to keep Windsurf's IP restricted.
Future Plans and Business Strategies
Another argument is over how much Microsoft would own if OpenAI went public, and the demand is more than what the ChatGPT maker is willing to give, the sources told WSJ. The conversion to for-profit must be completed by 2025-end, if OpenAI wants to keep some $20 billion in funding.
The report added that the Microsoft-OpenAI partnership has been widely viewed as one of the most successful in tech history, and allowed the budding startup resources in exchange for the tech. This could now change, as both sides turn competitors, it said. (With inputs from WSJ, Reuters)
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