Microsoft and OpenAI strike tentative deal to revise partnership terms
For OpenAI, securing Microsoft’s sign-off has been essential, given the tech giant’s status as its largest backer and strategic partner.
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Microsoft and OpenAI have reached a provisional agreement to recalibrate the terms of their high-profile partnership, following weeks of tension over governance and equity stakes.
In a joint statement issued on Wednesday, the companies confirmed they had signed a non-binding memorandum of understanding (MoU) outlining the next phase of their collaboration. “We are actively working to finalise contractual terms in a definitive agreement. Together, we remain focused on delivering the best AI tools for everyone, grounded in our shared commitment to safety,” the statement said.
The partnership, first forged in 2019, has seen Microsoft pour more than $13 billion into OpenAI in exchange for a contractual claim on future profits. According to Business Insider, the exact size of that claim has been a key sticking point in recent negotiations, along with the extent of Microsoft’s access to OpenAI’s intellectual property.
The revised deal comes as OpenAI restructures its organisation. The company announced on Thursday that its nonprofit arm will now oversee its for-profit entity, ensuring board-level control remains with the nonprofit. The new arrangement gives OpenAI greater flexibility in distributing equity, enabling it to court fresh investment as it continues to burn through billions in funding.
For OpenAI, securing Microsoft’s sign-off has been essential, given the tech giant’s status as its largest backer and strategic partner. The agreement marks a significant step in stabilising the alliance between one of Silicon Valley’s most influential AI firms and one of the world’s biggest technology companies.
