Microsoft and OpenAI are reportedly in advanced negotiations for a new agreement that would grant Microsoft continued access to OpenAI’s technology even after the AI company achieves Artificial General Intelligence (AGI).
The companies have been engaged in regular discussions and could potentially reach an agreement within weeks, Bloomberg reports, citing three anonymous sources. While the negotiations have been characterized as positive, potential roadblocks remain, including regulatory scrutiny and Elon Musk’s lawsuit aimed at blocking OpenAI’s for-profit transition.
Microsoft, OpenAI’s largest backer with $13.75 billion invested and rights to some of the ChatGPT maker’s intellectual property, has been a key player in these extended talks that have lasted for months. The tech giant is seeking to secure its access to OpenAI’s technology beyond the current agreement, which terminates in 2030 or upon OpenAI’s declaration of AGI achievement—a milestone whose definition remains unclear.
Microsoft has built its Azure OpenAI Service around the startup’s models and integrated OpenAI’s technology into Copilot across Windows, Office, and GitHub products. If OpenAI were to suddenly declare AGI achievement and cut off access, Microsoft would lose a substantial strategic advantage. Meanwhile, OpenAI has reportedly informed investors that it expects to reduce Microsoft’s share of its revenue as the company progresses.
Both companies stand to benefit significantly from this arrangement. OpenAI aims to transition from its current structure as a mission-driven nonprofit overseeing a capped for-profit company to a more traditional commercial entity. Microsoft, in turn, would gain formal equity and potentially significant returns beyond just technological access. The current setup limits investor returns, but a standard for-profit structure would change that dynamic.
The negotiations reportedly include discussions about Microsoft acquiring an equity stake in the restructured OpenAI in the low- to mid-30% range. Additionally, OpenAI hopes to ensure that Microsoft deploys its technology safely, particularly as it approaches AGI capabilities.
