OpenAI May Have Screwed Up So Badly That Its Entire Future Is Under Threat

Battle of the titans.

Forgiveness or Permission

In its quest to become a for-profit entity, OpenAI may have catastrophically fumbled the bag with its patron Microsoft.

As the Financial Times reports based on insider interviews, Microsoft is ready to walk away from the frustrating negotiations with OpenAI as both parties seek to renew their partnership amid the latter's for-profit push. Earlier in the week, the Wall Street Journal revealed the increasing tensions between Microsoft and OpenAI about whether the larger company will even allow the smaller to go for-profit at all.

Along with OpenAI seeking Microsoft's blessing in its battle for profit — a push that has already proven legally problematic — the FT's reporting indicates that one of the chief sticking points between the two is the size of Microsoft's future investments in OpenAI, potentially hobbling the latter's endless quest for growth.

Deal or No Deal

According to the FT's unnamed insiders, representatives from the David-and-Goliath tech duo have been meeting daily to try to pin down a deal that would satisfy both. In exchange for its massive investment in the AI company, per this new reporting, Microsoft has battled for the better part of the year to get up to 49 percent of OpenAI's revenues — up from the 20 percent it gets right now under the terms of the current deal.

"We have a long-term, productive partnership that has delivered amazing AI tools for everyone," OpenAI and Microsoft said in a joint statement to the WSJ earlier in the week. "Talks are ongoing and we are optimistic we will continue to build together for years to come."

That terse statement belies the reportedly explosive tension between the companies, which has apparently gotten so near a boiling point that OpenAI is considering a "nuclear option": taking Microsoft to court for allegedly engaging in anticompetitive practices, per the WSJ.

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