Microsoft Talks Deeper Tech Collaboration as OpenAI Eyes Google, Oracle Backing

Microsoft Corp is in advanced negotiations with OpenAI that could give the software giant continued access to OpenAI’s most advanced AI models, even if the start‑up attains artificial general intelligence (AGI), removing a key obstacle to OpenAI’s planned shift to a for‑profit structure, Bloomberg reported.

Under the existing agreement scheduled to run through 2030, Microsoft would lose rights to new technology once OpenAI hits contractual AGI or $100 billion in cumulative investor profits.

The talks, which both companies describe as constructive, involve redefining what constitutes the AGI milestone and recalibrating Microsoft’s revenue‑share and equity stake in a restructured OpenAI. The report states that an accord could be reached within weeks after OpenAI CEO Sam Altman and Microsoft CEO Satya Nadella broached the topic at the Allen & Co Sun Valley conference this month.

Microsoft‑OpenAI Partnership

Microsoft has invested roughly $13.75 billion in OpenAI and currently holds an exclusive licence to bake OpenAI’s GPT models into its products. As OpenAI seeks to raise a $40 billion funding round, $20 billion of which from SoftBank hinges on completing these governance changes by year‑end, the renegotiation has become urgent. SoftBank would reduce its commitment if the new structure is not in place.

At issue is the definition of AGI, “systems that outperform humans at most economically valuable work”, and the timing of a business milestone tied to profitability. OpenAI’s board currently decides when AGI is reached, triggering Microsoft’s loss of rights while the business milestone would cut off Microsoft’s model access once OpenAI demonstrates the means to repay its investors.

Microsoft is pushing for language that ensures uninterrupted use of future models while OpenAI seeks flexibility to serve non‑Azure clients and strict safety‑standards enforcement.

The partnership has frayed since the 2023 firing and rehiring of Altman as both firms now compete for enterprise and consumer AI deployments. OpenAI has diversified its cloud partnerships to include Google, Oracle and CoreWeave, reducing its dependence on Azure. Meanwhile Microsoft insists on continued access and wants to avoid reverting to pre‑2030 terms.

The report states that Microsoft retains the upper hand given its deep pockets and technical contributions building the supercomputers behind ChatGPT. UBS strategists note that while investors debate the partnership’s future, Microsoft’s “leadership earned enough credibility” to secure favourable outcomes.

As Microsoft readies its fiscal Q4 2025 earnings, the deal’s resolution will be closely watched for its implications on Azure growth, Microsoft’s AI edge and the broader competitive ecosystem of next‑generation AI.