OpenAI executives have reportedly discussed filing an antitrust complaint against Microsoft, the company’s largest investor, over alleged violations of antitrust laws. The potential legal action, described as a ‘nuclear option,’ could disrupt a key business partnership involving billions in funding and Microsoft’s exclusive hosting rights for OpenAI models. This move marks a dramatic escalation in tensions between the two long-term AI partners, with sources indicating that the complaint would likely argue Microsoft is using its dominance in cloud services and contractual leverage to suppress competition.
The dispute centers on OpenAI’s efforts to transition from its current nonprofit structure into a public benefit corporation, a conversion that requires Microsoft’s approval. The companies have been unable to agree on details after months of negotiations, with OpenAI proposing a restructuring that would transform its existing for-profit arm into a Delaware-based public benefit corporation. This restructuring has sparked controversy, with Elon Musk alleging that OpenAI violated contract provisions by prioritizing profit over the public good in its push to advance AI. Musk has since sued to block the conversion, while Meta Platforms has also sought to prevent the move, citing concerns over the potential impact on competition.
Current discussions involve revising the terms of Microsoft’s investment, including the future equity stake it will hold in Open, as well as modifying exclusive hosting rights for Azure. OpenAI’s proposal includes reducing Microsoft’s equity stake to 33 percent in exchange for foregoing rights to future profits and modifying existing clauses that grant Microsoft exclusive hosting rights. These changes highlight the deepening rift between the two companies, with the antitrust complaint representing a potential turning point in their long-standing partnership. The situation remains unresolved, with the potential for significant financial and legal consequences for both parties.