Radhika Parashar
- The timeline by when Microsoft’s negotiations with OpenAI could complete by remains unclear
- Microsoft is taking time to understand its involvement in OpenAI if the firm restructures
- OpenAI wishes to start serving government clients
OpenAI has been planning to restructure into a for-profit AI company for a while now. The maker of ChatGPT, however, could have to wait for as long as next year to finalize this restructuring. OpenAI’s ongoing negotiations with Microsoft will need more time to be straightened out causing delays in the process.
OpenAI was conceived as a non-profit firm in 2015 by 11 co-founders including Sam Altman and Elon Musk among others. In 2019, the company managed to rope-in an investment of a billion dollars from Microsoft — a financial commitment that later expanded to become a multi-year funding deal slated to run until 2030. In exchange for this investment decision, Microsoft gets access to OpenAI’s advanced AI models and serves as the platform’s cloud provider.
At present, both OpenAI and Microsoft are in talks to negotiate if the terms of their agreement could be narrowed to let the AI company serve only government clients who are not customers of Microsoft Azure, the report claimed citing sources familiar with the matter.
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As part of the ongoing discussions, Microsoft is also taking time to understand its role in the future of OpenAI — whether it would be able to retain access to OpenAI’s technologies and oversee development or settle to limit its involvement to just integrating OpenAI products with its own.
The AGI clause between the companies is another key factor that is under intense discussions. Under this clause, OpenAI gets the right to cut off Microsoft’s access to its intellectual property if it achieves artificial general intelligence (AGI). This technology is predicted to outperform humans at economically valuable work.
While Microsoft chief Satya Nadella is pushing for a complete elimination of this clause, OpenAI is trying to keep it intact as it gives the AI firm crucial leverage over Microsoft.
“OpenAI having the AGI clause is negotiating chit. It’s a threat, but it’s more like mutually assured destruction because if it doesn’t go by year-end, they won’t be able to raise any money again and Sam [Altman] knows that,” the FT report quoted the source as saying.
To date, Microsoft has invested $13 billion in OpenAI. Upon the completion of the final discussions, the company expects to get up to 35 percent control over OpenAI.
More details on the situation remain awaited for now.
The valuation of Altman-headed OpenAI spiked from $157 billion in October 2024 to $300 billion in April 2025 after a recent funding round led by SoftBank fetched $40 billion in investments. As per reports, OpenAI’s revenue has exceeded $12.7 billion annually owing to over 700 million weekly active ChatGPT users worldwide.
