and the distribution of digital products.
The Microsoft–OpenAI alliance could fracture
OpenAI is reportedly considering a formal complaint against Microsoft alleging anti-competitive practices, according to The Wall Street Journal. The move, described as a “nuclear option,” comes amid negotiations over OpenAI’s desire to become a for-profit entity.
OpenAI executives have reportedly considered requesting a federal regulatory review of their contract with Microsoft, with the aim of identifying potential antitrust violations. An additional contingency plan involves a media campaign. These actions are under consideration as OpenAI seeks greater autonomy despite Microsoft’s significant financial and infrastructural support.
Microsoft provides the cloud computing infrastructure crucial for OpenAI’s operations. As part of their existing agreement, Microsoft receives a substantial share of OpenAI’s profits until its initial investments are recouped. Following this, Microsoft will maintain a significant stake in the company and continue to earn a percentage of OpenAI’s profits up to a specified limit. OpenAI remains technically independent.
Future of Microsoft OpenAI pact uncertain says report
Central to the dispute is the extent of Microsoft’s ownership stake in a potential for-profit version of OpenAI, which needs to complete the conversion by year’s end to secure $20 billion in funding. The Wall Street Journal reports that Microsoft is seeking a larger stake than OpenAI is willing to concede.
“We have a long-term, productive partnership that has delivered amazing AI tools for everyone,” representatives for OpenAI and Microsoft stated jointly to The Wall Street Journal. They added, “Talks are ongoing, and we are optimistic we will continue to build together for years to come.”