🖼 SoftBank's $20 billion investment may come to naught: OpenAI and Microsoft are at a stalemate over the restructuring issue

SoftBank's $20 billion investment may fall through: OpenAI and Microsoft at a standstill over restructuring

OpenAI is racing against time to restructure its business to fulfill the huge investment promised by SoftBank. At the end of March, OpenAI announced that SoftBank would lead a $10 billion investment in OpenAI as startup capital and conditionally invest an additional $30 billion before the end of this year. However, this goal has been blocked by major shareholder Microsoft. According to the agreement, if OpenAI fails to restructure into a for-profit entity by December 31 this year, SoftBank's total investment may be cut to $20 billion.

Previously, due to legal obstacles, OpenAI had given up transforming into a for-profit company and instead tried to restructure into a public welfare organization supervised by a non-profit parent company. But this requires the support of Microsoft. Unfortunately, sources pointed out that the negotiations between the two sides on the new for-profit structure have become increasingly intense and are currently at an impasse.

Media reports pointed out that OpenAI is even considering asking antitrust regulators to intervene to examine whether there are potential competitive barriers in its agreement with Microsoft to weaken Microsoft's ability to restrict OpenAI.

On Wednesday, there were also reports that if the two sides cannot reach an agreement on key issues, Microsoft may withdraw from the negotiations with OpenAI. Key issues include the scale of Microsoft's future shareholding in OpenAI.

Negotiation sticking points

There are two key issues in the negotiations between OpenAI and Microsoft. One is Microsoft's shareholding ratio in OpenAI after the restructuring, and the other is the strict regulations on technology sharing between the two sides.

It is reported that OpenAI hopes to change the terms of the existing agreement with Microsoft. According to the previous agreement, after Microsoft's investment, it obtained most of the equity of OpenAI's for-profit business, as well as exclusive access to OpenAI's APIs and models on Microsoft Cloud, revenue sharing, and the right to use OpenAI's intellectual property until 2030.

In addition, OpenAI also hopes to prevent Microsoft from obtaining the technology acquired by OpenAI through the $3 billion acquisition of the AI coding tool Windsurf.

Some media pointed out that Microsoft has put forward a proposal to give up its equity in OpenAI in exchange for preferential access to OpenAI's technology in the future. Combining previous news, Microsoft has also made concessions on the original terms. For example, after the Stargate project was made public, Microsoft gave up the exclusive right that OpenAI could only use Microsoft's cloud services.

Previously, a joint statement from Microsoft and OpenAI said that the two companies had established a long-term and productive partnership, bringing excellent artificial intelligence tools. Currently, the negotiations between the two companies are still ongoing, and both are optimistic that the two sides will continue to work together in the coming years.

However, insiders also revealed that if the negotiations finally break down, Microsoft is prepared to withdraw its investment. And this will definitely not be good news for OpenAI, which is seeking restructuring and at the same time facing a legal lawsuit from co-founder Elon Musk.

via cnBeta.COM - Chinese industry information website (author: Source: Caixin News Agency)