OpenAI is renegotiating its agreement with Microsoft with a view to a future IPO
According to Financial Times sources, Microsoft would be willing to reduce its share in the new company structure in exchange for access to future technologies beyond 2030
2' min read
Key points
2' min read
OpenAI and Microsoft are rewriting the terms of their partnership to enable the start-up company to go public in the future. The Financial Times reports this, citing sources. Microsoft is essential in OpenAI's corporate reorganisation plan and one of the knots to be unravelled in the negotiations is what share Redmond will have in a restructured OpenAI in which it has invested more than $13 billion so far. Microsoft and OpenAI are linked by the contract signed in 2019, when Redmond invested 10 billion in OpenAI, and which expires in 2030.
A strategic relationship
.The relationship with Microsoft has been decisive for OpenAI's fortunes. The meeting between Satya Nadella, Microsoft's ceo, and Altman in the summer of 2018, on the steps of the Allen & Co. investment bank's annual conference in Sun Valley, Idaho, was a turning point for OpenAI. With Microsoft's money (and servers) it was able to grow. While Microsoft was able to have access to its technologies. Nadella had also offered Altman a job when he was defenestrated by the board, and played a key role in his return to the top.
The WSJ had written in recent weeks that thepartnership between the two companies was experiencing some tension due to disagreements over computing power and access to the start-up's models. One area of tension was also OpenAI's development of human-intelligent models.
After OpenAI's IPO, what will Microsoft do?
Now the question becomes more pressing as Altman's company, valued at $260 billion, looks towards an IPO. What role will Microsoft play if OpenAI becomes a big tech company itself?
As the Financial Times writes, Microsoft is opposed to restructuring plans that would mark a further departure from its original non-profit mission. At the centre of the confrontation is the share of capital Microsoft will receive in return for the $13 billion already invested. The parties are also renegotiating the agreement signed in 2019, valid until 2030, which grants Microsoft access to OpenAI's technology and revenues. According to informed sources, Microsoft would be willing to reduce its share in the new company structure in exchange for access to future technologies beyond 2030.
