Microsoft is ready to break off ongoing negotiations with OpenAI over a profound restructuring of the billion-dollar alliance.

The planned transformation of OpenAI into a for-profit corporation is at the center – a prerequisite to securing new investor funds, including from SoftBank, for the long term and preparing for a stock market launch. Microsoft, so far involved with more than 13 billion dollars, would have to agree to such a structural change – otherwise OpenAI faces the loss of up to ten billion dollars in capital.

The core of the dispute is the question of what share Microsoft should receive in the new OpenAI construct. Participation ranges between 20 and 49 percent are being discussed. Additionally, the renegotiation of the existing contract is on the agenda: Microsoft currently holds exclusive rights to distribute OpenAI models via Azure and participates with 20 percent of revenues up to a threshold of 92 billion dollars.

An abrupt withdrawal from the talks is nevertheless not favored in Redmond. Both parties meet daily, they emphasized in a joint statement, to find a solution in the "mutual interest." However, internally Microsoft is also prepared to let the current contractual framework run until 2030 – including all rights to access OpenAI technology, should no improved solution be achieved.

At the same time, Microsoft diversifies its AI strategy: In May, Elon Musk's "Grok" model from xAI was included in the Azure portfolio. CEO Satya Nadella increasingly believes that foundational AI models are becoming commoditized – the competitive advantage will lie in the applications and digital assistants built on them in the future.

Tensions with OpenAI, meanwhile, are increasing. Internal sources report growing frustration over Sam Altman's demands for faster provision of computing capacities. Access to GPU infrastructure is essential given 500 million weekly users on ChatGPT and parallel model development.

If the restructuring fails or is delayed, investors would have the right under contractual clauses to reclaim parts of their investment. SoftBank, in particular, could reduce its $30 billion stake by up to one-third. The approval of the attorneys general in California and Delaware is still pending, and a lawsuit from xAI founder Musk against OpenAI regarding the planned restructuring is ongoing.

Microsoft, on the other hand, makes it clear: Maintaining the status quo is a realistic option - revenues continue to flow, technological access is secured. A complete withdrawal would only be necessary if OpenAI attempted to actively undermine the terms of existing contracts.