OpenAI Faces 80% Investment Cut as Microsoft Talks Stall

OpenAI is urgently restructuring its business to secure a significant investment from SoftBank. In late March, OpenAI announced that SoftBank would lead an investment of 100 billion dollars as seed capital, with a conditional follow-up investment of 300 billion dollars by the end of the year. However, this goal has been hindered by its major shareholder, Microsoft. According to the agreement, if OpenAI fails to restructure into a for-profit entity by December 31, SoftBank's total investment may be reduced to 200 billion dollars.

Previously, due to legal obstacles, OpenAI abandoned its plan to transform into a for-profit company and instead attempted to restructure as a non-profit entity overseen by a non-profit parent company. This requires Microsoft's support, but unfortunately, sources indicate that negotiations over the new for-profit structure have become increasingly contentious and are currently at a stalemate.

OpenAI is even considering seeking the intervention of antitrust regulatory authorities to review whether there are potential competitive barriers in its agreement with Microsoft that could weaken Microsoft's ability to restrict OpenAI. On Wednesday, it was reported that if the two parties cannot reach an agreement on key issues, Microsoft may withdraw from negotiations with OpenAI. Key issues include Microsoft's future shareholding in OpenAI.

The two key issues in the negotiations between OpenAI and Microsoft are Microsoft's shareholding ratio in OpenAI after restructuring and the strict regulations on technology sharing between the two parties. It is understood that OpenAI hopes to change the terms of the existing agreement with Microsoft. According to previous agreements, after Microsoft's investment, it obtained a large portion of OpenAI's for-profit business shares, as well as exclusive access to OpenAI's API and models on Microsoft Cloud, revenue sharing, and the right to use OpenAI's intellectual property until 2030.

Additionally, OpenAI hopes to prevent Microsoft from acquiring the technology obtained from the 30 billion dollar acquisition of the AI coding tool Windsurf. It is reported that Microsoft has proposed giving up its shares in OpenAI in exchange for priority use of OpenAI's technology in the future. According to previous information, Microsoft has also made concessions on the original terms, such as after the Star Gate project was made public, Microsoft gave up its exclusive right to use only Microsoft Cloud services.

Previously, in a joint statement, Microsoft and OpenAI stated that the two companies have established a long-term, productive partnership, bringing about excellent artificial intelligence tools. Currently, negotiations between the two companies are still ongoing, and both are optimistic that they will continue to work together in the coming years. However, insiders have revealed that if the negotiations ultimately fail, Microsoft is prepared to withdraw its investment. This would not be good news for OpenAI, which is seeking restructuring and facing a lawsuit from co-founder Musk.