Report: OpenAI Executives Discussed Accusing Microsoft of Anticompetitive Behavior

Tensions between longtime partners OpenAI and Microsoft have reportedly reached a point where OpenAI executives have discussed accusing Microsoft of anticompetitive behavior and seeking a federal regulatory review of the terms of their contract.

The tensions center in part on whether Microsoft would have access to the intellectual property of Windsurf, if OpenAI acquires that coding startup, and how big Microsoft’s share of OpenAI would be if OpenAI converts into a public-benefit corporation, the Wall Street Journal (WSJ) reported Monday (June 16), citing unnamed sources.

Asked about the report by the WSJ, the companies told the publication in a joint statement: “We have a long-term, productive partnership that has delivered amazing AI tools for everyone. Talks are ongoing and we are optimistic we will continue to build together for years to come.”

The reported dispute over the intellectual property of Windsurf came about because the agreement between the two companies provides Microsoft with access to all of OpenAI’s intellectual property (IP), but because they have competing products for coding, OpenAI does not want Microsoft to have access to the IP of Windsurf, which OpenAI is acquiring for $3 billion, according to the report.

In the case of OpenAI’s planned conversion into a public-benefit corporation, Microsoft is reportedly asking for a larger stake in the new company that would result from that move than OpenAI is willing to give, the report said.

The companies have reportedly also disagreed about whether OpenAI can partner with other cloud providers and whether Microsoft would still have access to OpenAI’s technology after OpenAI says its models have achieved artificial general intelligence (AGI), per the report.

It was reported in May that Microsoft and OpenAI were renegotiating their partnership deal to one in which the software giant would protect its equity stake while ensuring access to future technologies, and OpenAI gets more flexibility, with a possible initial public offering in its future.

During that same month, it was reported that one of the key issues in these discussions was how much equity in a restructured OpenAI Microsoft would get in exchange for the $13 billion-plus it has invested in the startup.