OpenAI (OPAI.PVT) is under pressure to restructure its business before year’s end — or risk losing half of a potential $40 billion investment led by SoftBank. The AI powerhouse plans to convert its for-profit arm into a public benefit corporation under its nonprofit parent to gain greater control over revenue and strategy.
But the company’s largest roadblock is its closest ally: Microsoft (MSFT).
Microsoft’s $10 billion investment in 2023 gave it a major stake in OpenAI’s for-profit unit, plus exclusive rights to its APIs, models on Azure, and intellectual property through 2030. While the partnership has been highly profitable — Microsoft’s Intelligent Cloud pulled in $105 billion in fiscal 2024 — OpenAI is now pushing back on what it views as restrictive deal terms.
Negotiations for a new structure have reportedly soured. According to The Wall Street Journal, OpenAI may even seek antitrust intervention. Meanwhile, The Financial Times reports Microsoft is prepared to walk away entirely.
Without Microsoft’s approval, OpenAI’s restructuring — and its shot at billions in new funding — may collapse.