Microsoft is reportedly fighting with OpenAI over how much and how much to get parts from the artificial intelligence giant as it prepares to transform from a nonprofit to a for-profit company. It is being
Microsoft is seeking a majority stake in OpenAI in exchange for the $14 billion in cash it has previously injected into the company, and both companies are seeking advice from investment banks in the high-stakes negotiations. According to the Wall Street Journal.
Microsoft, led by CEO Satya Nadella, has hired Morgan Stanley, the newspaper reported, citing unnamed sources close to the situation.
Meanwhile, OpenAI, led by 39-year-old tech tycoon Sam Altman, has hired Goldman Sachs, according to sources.
Microsoft is OpenAI's largest investor, starting with a huge capital injection in 2019.
The company participated in a recently concluded $6.6 billion funding round, valuing OpenAI at $157 billion, despite a projected $5 billion loss this year.
In addition to the amount of Microsoft's stock, the two companies will also negotiate the scope of Microsoft's governance authority, the report said.
The Post has reached out to Microsoft and OpenAI for comment.
According to multiple reports, OpenAI's board plans to restructure as a for-profit company, where company leaders will consider both social impact and profits when making decisions.
The nonprofit organization that has managed OpenAI since 2015 will continue to exist and hold a stake in the for-profit entity, but will no longer have any liability.
OpenAI's nonprofit board briefly ousted Mr. Altman as CEO last fall, but Mr. Nadella and other key investors intervened before Mr. Altman took the helm again.
Another report says the fight over stock rights is unfolding amid signs of behind-the-scenes tensions between Microsoft and OpenAI.
Altman and his allies were outraged by Microsoft's decision to hire AI pioneer Mustafa Suleiman. The New York Times reported.
Suleiman is Microsoft's head of consumer AI, reporting directly to Nadella.
Suleiman co-founded the Google-owned DeepMind Institute and later ran the startup Inflection AI. Most of the latter's staff followed Suleiman to Microsoft.
The paper said some OpenAI staff were furious over a recent incident in which Suleiman allegedly accused the company of not delivering new AI technology to a colleague at Microsoft as quickly as expected.
Other employees at Altman's company are said to be frustrated that Microsoft engineers were circumventing mutually agreed-upon protocols when downloading OpenAI software.
Meanwhile, OpenAI is reportedly seeking more favorable terms from Microsoft in an effort to secure more computing power to run its AI programs and allow it to seek outside sources. are.
OpenAI's computing costs will soar to $37.5 billion a year by 2029, according to internal documents obtained by the newspaper.
Microsoft and other major investors in the latest funding round will reportedly renegotiate OpenAI's valuation or receive a full refund if the for-profit transition is not completed within two years. He says he has the right.
Altman is also expected to receive a stake in the for-profit company, but he disputed a Bloomberg report that said he could receive a 7% stake worth more than $10 billion, calling it “ridiculous.” did.
