Microsoft and ChatGPT’s creator clashing over what comes next
OpenAI can’t move forward without the tech giant’s blessing.
Microsoft has poured more than $13 billion into OpenAI, ChatGPT’s creator, making it the startup’s biggest investor. But now, OpenAI wants to restructure itself further away from its non-profit origins and eventually go public. That shift requires rewriting the terms of the relationship and Microsoft is the main holdout that needs convincing.
And according to a new report (subscription required), OpenAI and Microsoft are in the middle of some serious talks to reshape their multibillion-dollar partnership – and the outcome could decide how ChatGPT’s maker moves toward an IPO without losing access to the powerful tools and tech it’s built with Microsoft’s help.
One of the biggest issues? Figuring out how much equity Microsoft gets in OpenAI’s restructured business. Both companies are apparently also working on updating their original contract from 2019 – the one that set the terms for Microsoft’s access to OpenAI’s models, products and how revenue is shared.
Previously, OpenAI CEO Sam Altman has made it clear: he’s chasing artificial general intelligence (AGI), tech that could outperform humans. OpenAI recently backed off controversial changes that would’ve taken control away from its non-profit board. However, it’s still pushing to make its business arm a Public Benefit Corporation (PBC). This structure balances profit with social impact. Others like Anthropic and xAI have gone that route, too.
A source close to OpenAI said that converting to a PBC is key if the company wants to go public. But it’s not smooth sailing. Several insiders say there’s been some friction between OpenAI and Microsoft lately, as their goals start to diverge.
Microsoft still powers OpenAI with massive compute resources and uses its models in products like Copilot, but OpenAI’s also building its own thing – including a big computing project called “Stargate,” with possible help from SoftBank and Oracle. And some in Redmond don’t love the vibe.
Still, it is not war – yet. A person close to OpenAI added that Microsoft still wants this to work.
OpenAI got its start in 2015 as a non-profit founded by Altman, Elon Musk and others. In 2019, it spun up a for-profit arm that let investors share in profits – but only up to a capped amount. Back then, investors were told to think of their funding more like a donation. But recent deals have been way more business-focused.
In October, OpenAI raised $6.6 billion from Microsoft, SoftBank, Thrive Capital and others. Then in March, it pulled in another $40 billion in a round led by SoftBank. These deals included specific terms on how much equity investors get if OpenAI completes its PBC conversion. If it doesn’t happen, investors could pull their cash back – though insiders say they are still confident everyone will stick around, even if the process takes longer.
Even with Microsoft on board, OpenAI still has other hoops to jump through. For example, OpenAI will need to convince regulators in California and Delaware that the changes stick to its original public mission. Delaware’s attorney general said she’s reviewing the new proposal to make sure the non-profit still holds real control.
Also, Elon Musk, who left OpenAI years ago, is suing to block the restructure because the changes could shift the power and money from AGI development away from the public and into the hands of OpenAI’s backers.
If that plan fails, it could deal a major blow to OpenAI’s future – limiting its ability to raise money, go public, and compete with giants like Google.
One of the biggest issues? Figuring out how much equity Microsoft gets in OpenAI’s restructured business. Both companies are apparently also working on updating their original contract from 2019 – the one that set the terms for Microsoft’s access to OpenAI’s models, products and how revenue is shared.
Sources say Microsoft is open to giving up part of its equity in exchange for continued access to new OpenAI tech beyond the current 2030 agreement. That could help clear the way for OpenAI’s new corporate structure and it’s a big deal for the company’s future.
Previously, OpenAI CEO Sam Altman has made it clear: he’s chasing artificial general intelligence (AGI), tech that could outperform humans. OpenAI recently backed off controversial changes that would’ve taken control away from its non-profit board. However, it’s still pushing to make its business arm a Public Benefit Corporation (PBC). This structure balances profit with social impact. Others like Anthropic and xAI have gone that route, too.
A source close to OpenAI said that converting to a PBC is key if the company wants to go public. But it’s not smooth sailing. Several insiders say there’s been some friction between OpenAI and Microsoft lately, as their goals start to diverge.
Microsoft still powers OpenAI with massive compute resources and uses its models in products like Copilot, but OpenAI’s also building its own thing – including a big computing project called “Stargate,” with possible help from SoftBank and Oracle. And some in Redmond don’t love the vibe.
The friction comes partly due to style. OpenAI says to Microsoft ‘gives us money and compute and stay out of the way: be happy to be on the ride with us.’ So naturally this leads to tensions. To be honest, that is a bad partner attitude, it shows arrogance.
– Anonymous senior Microsoft staffer, May 2025
OpenAI got its start in 2015 as a non-profit founded by Altman, Elon Musk and others. In 2019, it spun up a for-profit arm that let investors share in profits – but only up to a capped amount. Back then, investors were told to think of their funding more like a donation. But recent deals have been way more business-focused.
In October, OpenAI raised $6.6 billion from Microsoft, SoftBank, Thrive Capital and others. Then in March, it pulled in another $40 billion in a round led by SoftBank. These deals included specific terms on how much equity investors get if OpenAI completes its PBC conversion. If it doesn’t happen, investors could pull their cash back – though insiders say they are still confident everyone will stick around, even if the process takes longer.
Even with Microsoft on board, OpenAI still has other hoops to jump through. For example, OpenAI will need to convince regulators in California and Delaware that the changes stick to its original public mission. Delaware’s attorney general said she’s reviewing the new proposal to make sure the non-profit still holds real control.
If that plan fails, it could deal a major blow to OpenAI’s future – limiting its ability to raise money, go public, and compete with giants like Google.
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