Microsoft and OpenAI Are fighting over control of new AI models: ownership limits, revenue split, early-access rights
- Graziano Stefanelli
- Jun 22
- 8 min read
Microsoft has invested over $13 billion in OpenAI since 2019, giving it exclusive access to advanced language models that power tools like Copilot and Bing. OpenAI depends on Microsoft’s cloud computing and financial support to run and expand its large-scale AI projects.
Recently, their relationship has become strained due to disagreements on several fronts. OpenAI wants to cap Microsoft’s ownership at around 33% of its for-profit operations and gradually reduce Microsoft’s share of future revenue below the current 20%. OpenAI’s leadership also hopes to secure more independence when launching new technologies or pursuing acquisitions, such as the rumored Windsurf project, without automatically sharing every development with Microsoft.
Microsoft, for its part, is keen on protecting the benefits of its multi-billion dollar investment. The company is pushing for continued early access to OpenAI’s best new models and wants to maintain its influence over key business decisions. This is particularly important as the existing contract between them will expire in 2030, after which Microsoft’s guaranteed privileges could disappear.
If they fail to reach a new agreement, both companies would face real challenges. Microsoft could lose its leading edge in AI-enabled products and might need to invest heavily in its own research or look for other technology partners. OpenAI, meanwhile, would lose a crucial source of funding and technical infrastructure, possibly slowing its growth or forcing it to seek new investors.
For years, the story of artificial intelligence has been shaped in large part by the deep and ambitious partnership between Microsoft and OpenAI.
Their collaboration has brought advanced AI tools, like ChatGPT, from research labs into the hands of everyday people and businesses, powering popular products such as Microsoft Copilot, Bing, and the broader Office suite. With Microsoft’s substantial investments and OpenAI’s technical breakthroughs, these two companies have together built a foundation for much of the AI revolution we see today.
But recently, the relationship between these industry giants has become strained, as new disagreements about money, control, and the direction of future AI development have come to the surface. These tensions are not just corporate drama—they could have far-reaching consequences for the future of artificial intelligence, for the pace of AI innovation, and for everyone who depends on these tools.
How Did Microsoft and OpenAI Become So Close?
The partnership between Microsoft and OpenAI didn’t happen overnight; it was built slowly, step by step, over several years. Back in 2019, Microsoft made its first major move, investing $1 billion in OpenAI. That initial investment set the stage for even deeper collaboration. As OpenAI’s models became more powerful and its ambitions grew, Microsoft continued to provide funding, eventually pouring in over $13 billion. This was not just a financial arrangement; it was a meeting of mutual interests. Microsoft needed cutting-edge AI to power its own services, especially in its cloud platform Azure, and OpenAI needed vast amounts of computing power to train its ever-larger language models. By working together, Microsoft gained special early access to OpenAI’s most advanced technologies—everything from GPT-4 to image generators like DALL-E—while OpenAI got the resources and cloud infrastructure it needed to scale up quickly.
Their collaboration went well beyond business contracts. Microsoft integrated OpenAI’s models deeply into its software, launching new features like Copilot in Microsoft 365 apps and enhancing search in Bing with conversational AI. OpenAI, meanwhile, benefited from Microsoft’s global reach, cloud power, and enterprise customers, which helped it move from being a research lab to a company with real products and revenue. The relationship became known as one of the most significant partnerships in the technology industry, and it set a fast pace that competitors scrambled to match.
What’s the Problem Now?
Over time, as both Microsoft and OpenAI have experienced tremendous growth and seen their ambitions expand, their partnership has naturally become more complicated, and the points of disagreement have grown both in number and in significance. The problems now surfacing are the kind that arise when two powerful companies, each with its own vision for the future, must decide how to share control, profits, and intellectual property in an industry that is evolving at breathtaking speed.
A central and very sensitive issue centers around ownership and control—specifically, how much of OpenAI’s for-profit side Microsoft should ultimately own. When Microsoft first invested in OpenAI, the company was still relatively small and relied heavily on outside support to achieve its ambitious goals. Over time, as OpenAI’s profile has skyrocketed, it has become increasingly wary of ceding too much control to any one partner, no matter how important that partner has been to its growth. OpenAI now wants to put a firm limit on Microsoft’s ownership, reportedly aiming to cap it at about one-third of the for-profit entity. This is partly about independence and governance, but it’s also about ensuring that OpenAI retains the flexibility to chart its own course as the AI field becomes ever more strategic and competitive.
For Microsoft, which has invested not just vast amounts of money but also significant time and technical resources, this proposed cap on ownership may feel limiting, especially considering how essential OpenAI’s models have become for Microsoft’s own AI products and cloud business. Microsoft sees its investment as more than just a financial stake—it’s a strategic move that underpins its place in the AI race. The company wants to ensure that it continues to have meaningful influence over OpenAI’s future and secure access to the very best AI technology, especially as AI becomes central to almost every major software product.
Another major challenge revolves around how the profits from OpenAI’s models are shared. Up until now, Microsoft has been receiving about 20% of OpenAI’s revenue, which is a significant stream given how quickly demand for AI services has grown. But as OpenAI becomes more confident in its own business model and starts making money from licensing, API access, and enterprise contracts, it wants to keep more of that revenue for itself. The company is signaling plans to reduce Microsoft’s share, perhaps even halving it by the end of this decade. This creates friction because Microsoft’s long-term return on its investment would shrink, even as OpenAI continues to benefit from Microsoft’s global reach and infrastructure.
Beyond ownership and profit sharing, the question of access to OpenAI’s most advanced technology and intellectual property has become a battleground. Microsoft has grown accustomed to having first access to OpenAI’s latest models, breakthroughs, and inventions—everything from new language models to advanced vision systems. However, as OpenAI explores new business directions, including the rumored acquisition of companies and the development of proprietary technology under new initiatives (like the “Windsurf” project), it wants to maintain the freedom to choose what it shares with Microsoft. OpenAI’s leaders are now drawing clearer lines, reserving the right to keep some new technology private or make deals with other partners. For Microsoft, this threatens a key benefit of their original deal, which was based on early and exclusive access to the world’s best AI.
The final source of disagreement is about how long this special partnership should continue and under what terms. The current agreement guarantees Microsoft a privileged relationship with OpenAI’s technology until 2030. As that date comes closer, both sides are thinking about the future. Microsoft would like to extend or even expand the partnership, ensuring it remains central to the next decade of AI innovation. OpenAI, however, is more cautious, wanting to make sure it is not permanently tied to a single company and can adapt its relationships as the industry evolves and as new opportunities or challenges arise.
All these disagreements are being discussed at a time when the stakes are rising fast—AI models are becoming more powerful, markets are growing, and regulators are starting to look more closely at how major tech companies cooperate and compete. The atmosphere around the negotiations is tense, as each side tries to protect its interests and set itself up for the next era of AI.
What’s at Stake?
This is not a minor corporate squabble or just a negotiation about who gets what. The stakes are genuinely high for both companies, and, by extension, for the whole world of AI. For Microsoft, the partnership with OpenAI has become a pillar of its AI strategy. If things fall apart, Microsoft risks losing access to the very best and most advanced language models—technology that underpins many of its key products and services. Without OpenAI, Microsoft would need to ramp up its own in-house AI research, which could take years to match the sophistication of OpenAI’s offerings. It might also force Microsoft to look for new partnerships or even acquire rival AI startups, creating new risks and uncertainties.
For OpenAI, the stakes are equally significant. Although the company is now better known and more established than it was just a few years ago, it still relies heavily on Microsoft’s financial support, global infrastructure, and the distribution channels that bring its technology to millions of users. If the partnership ends, OpenAI could face serious challenges in funding, scaling, and reaching new customers. The company might have to look to other giants like Google, Amazon, or Apple for support, or possibly even become more of a direct competitor to its former partner.
And beyond both companies, the outcome of these negotiations will affect the entire technology landscape. The Microsoft–OpenAI alliance has set the tone for AI development worldwide, pushing other tech giants to innovate faster and compete harder. If the relationship breaks down, it could slow the pace of progress, create uncertainty about the future direction of AI, or provoke a scramble among the biggest players to snap up new partnerships, talent, and technology.
What Could Happen Next?
At this point, the future is uncertain, and several very different scenarios are possible. In the best-case scenario, both sides find enough common ground to continue working together. This would probably mean a renegotiated agreement, with new rules about profit sharing, control, and technology access, that reflects both companies’ evolving needs. Such an outcome would help maintain stability in the AI ecosystem and let both Microsoft and OpenAI focus on innovation rather than legal battles.
But there’s also a real chance that things could fall apart. If the disagreements prove too deep, Microsoft could decide to walk away from the partnership. Under the terms of the current contract, Microsoft would still have rights to use OpenAI’s models and technology until 2030, but after that, they would be on their own. Microsoft might have to pour even more resources into its own AI research teams or look elsewhere for cutting-edge models, which could change the competitive balance in the tech industry.
The negotiations could also turn messy, spilling into the public eye. If OpenAI feels that Microsoft is acting unfairly or exerting too much control, it could raise the issue with regulators or accuse Microsoft of anticompetitive behavior. That might bring in government investigations and legal challenges, dragging the whole dispute into court and adding more uncertainty for both companies.
It’s even possible that other tech giants—like Google, Amazon, or Apple—could get involved, either by trying to partner with OpenAI or by attempting to hire away its top engineers. Such moves could create a fresh wave of competition, but they could also introduce new risks and instability as the power dynamics in the AI world shift.
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