News from the AI & ML world
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Kevin Okemwa@windowscentral.com
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OpenAI and Microsoft are reportedly engaged in high-stakes negotiations to revise their existing partnership, a move prompted by OpenAI's aspirations for an initial public offering (IPO). The discussions center around redefining the terms of their strategic alliance, which has seen Microsoft invest over $13 billion in OpenAI since 2019. A key point of contention is Microsoft's desire to secure guaranteed access to OpenAI's AI technology beyond the current contractual agreement, set to expire in 2030. Microsoft is reportedly willing to sacrifice some equity in OpenAI to ensure long-term access to future AI models.
These negotiations also entail OpenAI potentially restructuring its for-profit arm into a Public Benefit Corporation (PBC), a move that requires Microsoft's approval as the startup's largest financial backer. The PBC structure would allow OpenAI to pursue commercial goals and attract further capital, paving the way for a potential IPO. However, the non-profit entity would retain overall control. OpenAI reportedly aims to reduce Microsoft's revenue share from 20% to a share of 10% by 2030, a year when the company forecasts $174B in revenue.
Tensions within the partnership have reportedly grown as OpenAI pursues agreements with Microsoft competitors and targets overlapping enterprise customers. One senior Microsoft executive expressed concern over OpenAI's attitude, stating that they seem to want Microsoft to "give us money and compute and stay out of the way." Despite these challenges, Microsoft remains committed to the partnership, recognizing its importance in the rapidly evolving AI landscape.
ImgSrc: cdn.mos.cms.fut
References :
These negotiations also entail OpenAI potentially restructuring its for-profit arm into a Public Benefit Corporation (PBC), a move that requires Microsoft's approval as the startup's largest financial backer. The PBC structure would allow OpenAI to pursue commercial goals and attract further capital, paving the way for a potential IPO. However, the non-profit entity would retain overall control. OpenAI reportedly aims to reduce Microsoft's revenue share from 20% to a share of 10% by 2030, a year when the company forecasts $174B in revenue.
Tensions within the partnership have reportedly grown as OpenAI pursues agreements with Microsoft competitors and targets overlapping enterprise customers. One senior Microsoft executive expressed concern over OpenAI's attitude, stating that they seem to want Microsoft to "give us money and compute and stay out of the way." Despite these challenges, Microsoft remains committed to the partnership, recognizing its importance in the rapidly evolving AI landscape.
ImgSrc: cdn.mos.cms.fut
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References :
- the-decoder.com: OpenAI is planning a major overhaul of its corporate structure as it prepares for a possible IPO, but its most important backer, Microsoft, is setting conditions—and the relationship remains tense.
- www.techradar.com: OpenAI and Microsoft could be revising their agreement as OpenAI explores the future of listing as a public company.
- www.windowscentral.com: Microsoft is reportedly in the process of reworking its partnership, willing to give up some equity to continue accessing sophisticated AI models beyond 2030.
- The Rundown AI: OpenAI, Microsoft's 'high-stakes' negotiations
Classification:
- HashTags: #AIPartnership #AINegotiations #AIinnovation
- Company: Microsoft
- Target: OpenAI
- Type: News
- Severity: Medium