Microsoft prepared to walk away from high-stakes OpenAI talks

Microsoft is ready to stay away from high risk negotiations with Openai on the future of its alliance with billions of dollars, as the Chatgpt maker seeks to convert into a profitable company.

The program giant has thought about stopping complex discussions with the start of the 300 billion dollars of artificial intelligence if the two sides are unable to agree on critical issues, such as the size of the Microsoft Future share in Openai, according to people who have knowledge of his plans.

At this possibility, Microsoft will rely on its current commercial contract to retain access to Openai until 2030, unless there is an equal or better offer than its current arrangements, according to these people.

However, these people emphasized that Microsoft was working in “goodwill” and that both parties were gathering daily to try to put a plan on the table and they were hoping to reach a deal.

“We have a long -term partnership and a product that has gave amazing AI tools for everyone,” said Microsoft and Openai in a joint statement. “The conversations are continuing and we are optimistic. We will continue to build together for years to come.”

Openai needs a deal with Microsoft to complete away from its non -profit assets to the structure of the most traditional companies, which it believes will open funding and launch a preliminary general offer.

Microsoft must agree to switch by the end of the year or Openai risk loss of billions of funding from other investors, including SoftBank.

In the discussions over the past year, the two sides have clashed about the amount of shares in the group that Microsoft should receive for more than $ 13 billion that has invested in Openai until now. Discussions around the share ranged between 20 percent and 49 percent.

The husband also reviews the terms of his broader contract, which was first formulated when Microsoft investigated one billion dollars in Openai in 2019.

Under its current ranking, Microsoft has exclusive rights to sell access to Openai’s models and receives a 20 percent share of revenues of up to $ 92 billion.

Microsoft hesitates to give the continuous land to Openai technology or its share of the group’s revenues, according to several people close to discussions.

The Wall Street Journal reported this week that Openai was considered a “nuclear choice” to accuse Microsoft of anti -competing behavior for its partnership.

A person close to Openai, who has also arriving at the IP IP address, said, “It was necessary for one of them to maintain its position in the race to market artificial intelligence against competitors such as Google and Meta.”

A person close to Microsoft said that the “current situation” is acceptable for the large technology company and that it is “happy with the current contract” and prepared “its operation” until 2030.

“The market is concerned with the amount of revenues achieved by Microsoft. [and] “This deal transmits revenues away from Microsoft,” said someone else who discussed negotiations with Microsoft CEOs.

“The question is, what does Microsoft happen in exchange for giving up the right to these revenues?”

Microsoft has already started diversification away from Openai models in recent months, as part of Satya Nadella’s belief that leading models will become “CommoditIted”-or have less value than being able to sell applications that support artificial intelligence and digital assistants designed above them.

In May, the Xai Grok software giant made from Elon Musk available to its cloud computing customers.

“Openai is no longer the candidate for necessity,” said a person close to Microsoft.

There are many other elements of the current contract for negotiation, including exclusive Microsoft rights to sell Openai programs through the Azure Cloud Computing Service; Her right to the first rejection of providing computing infrastructure to Openai; The software giant reached the intellectual property of the AI ​​group before it reached “artificial general intelligence”.

The last item refers to a point where Openai “” is a very independent system that surpasses humans in most of the economic value “and is likely to be dropped, as mentioned previously.

The CEO of Openai, Sam -German, its financial manager, Sarah Frayr, said that the company is fighting to reach the power of computing needed to operate Chatgpt, which races to 500 million active users per week all over the world, while training new models and launching products.

Two former executives at Microsoft involved in managing the Openai account requirements said that the relationship between groups has greatly stumbled on this issue, especially about Altman’s demands to reach faster to more infrastructure.

Even if the problems are solved, the treatment will have to be approved by the general lawyers in Delaware and California. This conversion is also subject to a legal challenge from the Xai Musk president, which was supported by the former Openai employees.

For Openai, getting an agreement with Microsoft is very important. Investors in the two previous AI Group’s financing rounds have agreed to successfully convert it to a profitable entity or their stock investment becomes debt.

In the event that this process delays or abandoned, investors have the option to claim some of their investments. Softbank, which led the last round, can reduce its $ 30 billion investments by $ 10 billion if the transfer is not completed by the end of the year. People close to Openai are confident that investors will keep their obligations, even if the transaction is late.

One of the ancient warriors in the Silicon Valley near Microsoft said that the software giant “knows that this is not their technically, from the Openai problem that negotiation is at all.”