Microsoft loses exclusive partner status, still wants some guarantees.
Microsoft and OpenAI are in advanced talks regarding a deal to give Microsoft ongoing access to the AI startup's technology.
Such an agreement would remove a major obstacle to OpenAI's aims to become a for profit company, reports Bloomberg.
Citing two people familiar with the negotiations, Bloomberg reports that the discussed terms would give Microsoft access to OpenAI's latest models and other technology even if OpenAI achieves its goal of "artificial general intelligence."
Artificial general intelligence (AGI) is sometimes also referred to as "human-level intelligence AI" and would essentially mean that OpenAI has evolved its AI to a point where it could match or surpass human abilities.
The current contract with Microsoft states that should OpenAI reach AGI, Microsoft would lose some rights to the technology.
The sources told Bloomberg that the tone of the talks has been positive, but a deal has not yet been finalized.
OpenAI was reportedly considering removing the AGI clause back in December 2024, at the time, motivated by the need to encourage investment in the company.
The AGI clause was instated as part of OpenAI's founding goal of creating AGI that was not controlled by Big Tech. However, with OpenAI looking to transition into a "for profit" company, this effort is somewhat redundant.
The company began looking to transition to a for-profit earlier this year, though has faced significant backlash.
Elon Musk, who donated to OpenAI's founding and has his own rival generative AI company xAI, has sued to stop the move. Meta and others have also protested any effort to reincorporate the company.
In May 2025, the company "dropped" the plans, instead opting to remove the profit cap on its for-profit subsidiary, but these new discussions seem to suggest the effort to fully transition is still underway.
According to a Reuters report, $20bn of investment led by SoftBank is contingent upon OpenAI successfully becoming a for-profit company by the end of the year.
Aside from the backlash, the major obstacle to OpenAI transitioning to a for-profit was the issue of Microsoft's stake in the company.
Microsoft is a major investor in OpenAI, having backed the company with some $13.75bn in investment.
Discussions between the two have been ongoing, with previous reports suggesting that Microsoft told OpenAI it was willing to give up some of its equity stake in the new for-profit business in return for accessing OpenAI's new technology developed after 2030, the current cut-off of the companies' contract.
Microsoft was also previously OpenAI's exclusive cloud provider.
Following OpenAI's Stargate announcement, the two clarified their relationship, with Microsoft described as a 'key initial technology partner' in Stargate but not an equity funder like rival Oracle (as well as SoftBank, OpenAI, and Abu Dhabi's MGX).
That announcement also saw Microsoft confirming that the partnership was no longer exclusive, but that Microsoft has a right of first refusal (ROFR).
Since then, OpenAI has signed major contracts with Oracle, CoreWeave, and even Google Cloud.
With Microsoft due to hold its earnings call today, July 30, the company will likely see some questions from investors regarding its relationship with OpenAI.
