Latest news with #Windsurf
Yahoo
3 hours ago
- Business
- Yahoo
Why OpenAI and Microsoft's AI partnership might be headed for a breakup
Microsoft has been one of OpenAI's biggest backers over the past three years, as OpenAI's flagship product, ChatGPT, has steadily embedded itself into our lives. But the multibillion-dollar relationship now appears to be on shaky ground, with rumors that OpenAI might file an antitrust complaint against the Windows-maker in an attempt to wriggle out of a longstanding agreement between the two companies. The Trump administration is trying to bring back asbestos How one company is revolutionizing the way we use everyday water Housing market weakness triggers Lennar to offer biggest incentives since 2009 The relationship, which began with Microsoft's $1 billion investment in OpenAI in 2019—and has since grown to include more than $10 billion in total funding—is built on Microsoft's entitlement to 49% of OpenAI Global LLC's profits, capped at roughly 10 times its investment. For years, the partnership has remained stable. When Sam Altman was briefly ousted as OpenAI CEO in November 2023, Microsoft remained steadfast in its support of the company. But recent events appear to have strained the relationship—specifically, a new deal OpenAI has made. OpenAI's pending acquisition of AI coding startup Windsurf—valued at $3 billion—has pushed its partnership with Microsoft to the brink. Reports suggest that OpenAI executives have threatened an antitrust complaint if Microsoft insists on full access to Windsurf's intellectual property after the deal closes. At the same time, Microsoft is reportedly uneasy about the prospect of OpenAI developing a competing Copilot product. The two companies did issue a joint statement that conveyed a sense of harmony, though it acknowledged no agreement had been reached regarding Windsurf. 'We have a long-term, productive partnership that has delivered amazing AI tools for everyone,' the companies said. 'Talks are ongoing and we are optimistic we will continue to build together for years to come.' Experts warn that OpenAI should think twice before following through on its reported threats. 'Siccing the antitrust cops on your rivals may feel very satisfying, but that strategy usually boomerangs back on the complaining company when they themselves get big and successful,' says Adam Kovacevich, founder and CEO of the Chamber of Progress, a tech industry coalition. Kovacevich argues that such internal disputes may grab headlines but ultimately distract from the broader goals. 'OpenAI and Microsoft are locked in a pretty intense AI competition with Google, Anthropic, and Meta, and these kind of governance disputes are ultimately a huge distraction from trying to win on the technology front,' he says. An internal OpenAI strategy document, recently surfaced in a court case, reveals the company's bold plan to evolve ChatGPT from a popular chatbot into an all-encompassing 'AI super assistant,' positioning it as both a crucial partner and a potential competitor to Microsoft. The document implicitly acknowledges OpenAI's reliance on partners to achieve massive scale, noting the infrastructure required to serve an enormous user base. Until January 2025, Microsoft was OpenAI's exclusive data center provider, in exchange for integrating OpenAI's models into Microsoft's products, including Copilot. Since then, the landscape has shifted. OpenAI has signed deals with CoreWeave and Oracle for additional computing capacity, and is reportedly close to an agreement with Google—despite Google offering a competing AI model—for cloud hosting. Meanwhile, Microsoft still holds a significant share in OpenAI's future profits. There are reports that OpenAI has proposed a deal to exchange Microsoft's entitlement to future profits for a 33% stake in a restructured OpenAI. But Microsoft currently retains significant control over whether OpenAI can restructure and, under a 2023 agreement, is also believed to be entitled to access any OpenAI technology, including that acquired through acquisitions—potentially giving Microsoft access to Windsurf's technology for its Copilot coding tools. For Microsoft, maintaining the status quo would likely be ideal. They would continue to access OpenAI's core technology, and benefit from Windsurf's specialist expertise to strengthen Copilot's coding capabilities. For OpenAI, the best-case outcome would involve restructuring into a for-profit entity with Microsoft's consent, while establishing boundaries to prevent Microsoft from encroaching on areas where OpenAI might eventually compete. OpenAI would also like to diversify its infrastructure partners—having admitted in legal documents that 'our current infrastructure isn't equipped to handle [redacted] users.' And, perhaps most importantly, OpenAI wants its product to stand on its own—rather than being buried within a Microsoft-branded ecosystem. 'Real choice drives competition and benefits everyone,' the confidential strategy document states. 'Users should be able to pick their AI assistant. If you're on iOS, Android, or Windows, you should be able to set ChatGPT as your default. Apple, Google, Microsoft, Meta shouldn't push their own AIs without giving users fair alternatives.' Whether OpenAI will achieve that goal remains an open question. This post originally appeared at to get the Fast Company newsletter: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 hours ago
- Business
- Yahoo
OpenAI's $40B Lifeline Could Vanish--Microsoft Standoff Puts Future in Jeopardy
OpenAI is racing against the clock to pull off a major corporate overhaul that could unlock as much as $40 billion in fresh capital. At the heart of it is a complex plan to convert its for-profit arm into a public benefit corporationone still governed by its nonprofit parent. But there's a catch: the restructuring can't move forward without Microsoft (NASDAQ:MSFT), which holds a sizable equity stake and deep contractual rights tied to OpenAI's APIs, IP, and Azure exclusivity. Negotiations have reportedly turned contentious, with OpenAI even weighing whether to involve antitrust regulators as a last resort. If the two sides fail to reach agreement by year-end, OpenAI could forfeit half of SoftBank's proposed investment. Microsoft has already ceded some groundgiving up exclusive cloud rights after OpenAI launched Project Stargate with SoftBank and Oracle. But the tech giant still maintains a right of first refusal and access to OpenAI's tech through 2030. Behind the scenes, the power struggle is heating up. Bloomberg reports OpenAI is now looking to block Microsoft from accessing IP tied to its $3 billion Windsurf acquisition. Meanwhile, the Financial Times says Microsoft floated giving up equity in exchange for future tech accessunderscoring how high the stakes are for both sides. Despite public assurances of a long-term partnership, Microsoft insiders have signaled they're prepared to walk if talks break down. Adding pressure is OpenAI's nonprofit structure, which requires any asset transfer to be priced at fair market valueno shortcuts. With the for-profit arm's latest valuation pegged around $300 billion, any misstep could trigger legal challenges from state regulators. And then there's Elon Musk. The Tesla (NASDAQ:TSLA) CEO is suing to block OpenAI's corporate shift altogether, with a trial already on the docket. Between the regulatory landmines, partner standoff, and internal board control issues, OpenAI's path forward is anything but guaranteed. But one thing is clear: if the company wants to secure SoftBank's billions and redefine its future, the next six months will be pivotal. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
7 hours ago
- Business
- Yahoo
OpenAI's $40B Lifeline Could Vanish--Microsoft Standoff Puts Future in Jeopardy
OpenAI is racing against the clock to pull off a major corporate overhaul that could unlock as much as $40 billion in fresh capital. At the heart of it is a complex plan to convert its for-profit arm into a public benefit corporationone still governed by its nonprofit parent. But there's a catch: the restructuring can't move forward without Microsoft (NASDAQ:MSFT), which holds a sizable equity stake and deep contractual rights tied to OpenAI's APIs, IP, and Azure exclusivity. Negotiations have reportedly turned contentious, with OpenAI even weighing whether to involve antitrust regulators as a last resort. If the two sides fail to reach agreement by year-end, OpenAI could forfeit half of SoftBank's proposed investment. Microsoft has already ceded some groundgiving up exclusive cloud rights after OpenAI launched Project Stargate with SoftBank and Oracle. But the tech giant still maintains a right of first refusal and access to OpenAI's tech through 2030. Behind the scenes, the power struggle is heating up. Bloomberg reports OpenAI is now looking to block Microsoft from accessing IP tied to its $3 billion Windsurf acquisition. Meanwhile, the Financial Times says Microsoft floated giving up equity in exchange for future tech accessunderscoring how high the stakes are for both sides. Despite public assurances of a long-term partnership, Microsoft insiders have signaled they're prepared to walk if talks break down. Adding pressure is OpenAI's nonprofit structure, which requires any asset transfer to be priced at fair market valueno shortcuts. With the for-profit arm's latest valuation pegged around $300 billion, any misstep could trigger legal challenges from state regulators. And then there's Elon Musk. The Tesla (NASDAQ:TSLA) CEO is suing to block OpenAI's corporate shift altogether, with a trial already on the docket. Between the regulatory landmines, partner standoff, and internal board control issues, OpenAI's path forward is anything but guaranteed. But one thing is clear: if the company wants to secure SoftBank's billions and redefine its future, the next six months will be pivotal. This article first appeared on GuruFocus. Sign in to access your portfolio
The Verge
9 hours ago
- Business
- The Verge
Inside Microsoft's complicated relationship with OpenAI
Beyond the selfies between Microsoft CEO Satya Nadella and OpenAI CEO Sam Altman, and the friendly conversations between the pair on stage, all is not well with Microsoft's $13 billion AI investment. Over the past year, multiple reports have painted a picture of a Microsoft and OpenAI relationship that is straining under pressure. As OpenAI battles for access to more compute power and less reliance on Microsoft, tensions have been rising during negotiations over the future of OpenAI's business and its Microsoft partnership. Microsoft backed down on being the exclusive cloud provider for OpenAI earlier this year, but OpenAI still needs Microsoft's approval to convert part of its business to a for-profit company. That's led to a potentially explosive outcome. OpenAI executives have now reportedly considered accusing Microsoft of anticompetitive behavior, which could mean regulators look even more closely at the terms of Microsoft and OpenAI's contract for potential violations of antitrust laws. The Wall Street Journal reports that OpenAI's potential acquisition of AI coding tool Windsurf is at the heart of the latest standoff, as OpenAI wants Windsurf to be exempt from its existing contract with Microsoft.
Time of India
a day ago
- Business
- Time of India
How 'discounts' on ChatGPT software may be straining OpenAI's ties with Microsoft
OpenAI is offering significant discounts on its enterprise version of ChatGPT, a move that has created tension with its major backer, Microsoft, a report has claimed. These discounts, typically ranging from 10% to 20%, are being offered to clients who sign multi-year contracts and bundle multiple OpenAI services, such as its API, the Deep Research agent, or the Codex coding assistant. The report says that the discounts may put OpenAI in direct competition with Microsoft's own offerings, particularly its Azure OpenAI Service , which allows businesses to access OpenAI's models through Microsoft's cloud infrastructure. This potential overlap may be the source of the friction between the two AI powerhouses. The strategy appears to be a direct bid to increase overall revenue and customer lock-in across OpenAI's diverse product portfolio. Notably, OpenAI is said to be eying expanding its customer base and achieving a target of $15 billion in ChatGPT-related enterprise revenue by 2030. As of earlier this year, OpenAI boasted $100 million in revenue from ChatGPT Enterprise and reported over three million paying business subscribers across its various ChatGPT plans. However, these discounted offerings are directly competing with Microsoft's sales teams, particularly for its Copilot AI services , reportedly leading to increased tension in their partnership. OpenAI's $3 billion acquisition has escalated tensions with Microsoft: Report According to a report by The Wall Street Journal, both companies are reportedly entangled in their most significant dispute to date, centred on OpenAI's recent $3 billion acquisition of coding firm Windsurf. It also said that tensions have escalated to the point where OpenAI executives have discussed filing antitrust complaints against Microsoft. The core of the disagreement lies in Microsoft's existing access to all of OpenAI's intellectual property under their current partnership agreement. OpenAI is now seeking to block Microsoft from accessing Windsurf's technology, particularly given that Microsoft offers its own competing AI coding product, GitHub Copilot. This acquisition has seemingly deepened existing cracks in their relationship, the report noted, adding that the increasing conflict has prompted some OpenAI executives to internally deliberate accusations of anticompetitive practices against Microsoft. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
