Tensions Rise As OpenAI Considers Lawsuit Against Microsoft
In Brief
OpenAI and Microsoft’s once-close AI partnership is unraveling amid disputes over control, infrastructure, and profit-sharing, with OpenAI pushing for independence and a potential public offering, while Microsoft resists structural changes that could cost it exclusive access and influence.
Ever since ChatGPT first launched, OpenAI and Microsoft looked like the dream team of AI. One brought the very best research on the market, the other brought scale. Together, they made the AI market into what it is today.
ChatGPT took off. Copilot rolled out across Microsoft’s entire software suite. Money poured in, the models kept improving, and the partnership between OpenAI and Microsoft came to define what Big Tech AI collaboration looked like.
But now, things are falling apart.
Multiple outlets report that OpenAI is considering taking Microsoft to court, potentially even on antitrust grounds. Behind the scenes, their negotiations seem to have stalled completely. What started as contractual friction has turned into a power struggle over equity, control, and the future of the most important AI lab on the planet.
At the center of it all is OpenAI’s push to go public. To make that happen, it needs to restructure as a public-benefit corporation, a move Microsoft has so far refused to approve. Without that green light, OpenAI is stuck. With it, Microsoft risks losing preferential rights, exclusive access, and billions in potential profit.
And so begins one of the biggest breakups in tech.
OpenAI Wants Out
OpenAI’s rise has been fueled by a balance: innovation wrapped inside a capped-profit structure, heavily backed by a corporate giant. But that model is running out of runway.
In recent months, OpenAI has been quietly laying the groundwork to restructure into a public-benefit corporation; a move that would let it go public, raise billions, and operate with more independence. It’s already been pitching this plan to investors, framing it as a way to pursue both profit and purpose without being boxed in by one partner’s terms.
But Microsoft, which has poured nearly $14 billion into OpenAI since 2019, still holds control over that transition. Under the current agreement, it has veto rights over structural changes. According to reports, it’s not willing to let this deal happen.
Microsoft already owns 49% of OpenAI’s for-profit subsidiary. Now, OpenAI is offering to convert that into a 33% stake in a new structure, if Microsoft gives up future profit-sharing. But Microsoft reportedly wants more. OpenAI, at the same time, is losing patience. The company seems to be increasingly willing to escalate, even if that means bringing regulators into the room.
Tension Is Rising
This isn’t just about corporate structure, but about control over infrastructure, IP, and the future of AI. One of the biggest flashpoints is Azure exclusivity. Right now, Microsoft has the sole right to host OpenAI’s models; a deal that made sense when OpenAI needed scale. But today, OpenAI is a different beast. It’s reportedly seeking to diversify its compute stack, closing deals with Google Cloud and building out capacity with Oracle and SoftBank’s Stargate project. Microsoft is not happy with this.
Then there’s the Windsurf acquisition. OpenAI’s $3 billion purchase of the AI coding startup has triggered another clash. Microsoft claims it should have access to Windsurf’s IP under its existing agreements with OpenAI. But OpenAI is pushing back, arguing that giving Microsoft access could create unfair advantages for competing products like GitHub Copilot. It’s a legal grey area, and another sign that what used to be collaboration now feels like competition.
The foundation of the entire conflict is clear: Microsoft and OpenAI no longer need each other in the same way, and both organizations know it.
Stakes for the Future of AI
What happens next could ripple across the entire AI landscape. If OpenAI succeeds in breaking away, it would mean a change in how foundational model labs operate, toward greater independence, diversified infrastructure, and possibly public markets. It would also send a message: even the strongest tech partnerships can break when one side outgrows the other.
For Microsoft, the risks are just as real. OpenAI has been the backbone of its AI offering, from Copilot in Office to integrations across Azure. Losing exclusive access, or seeing OpenAI go to market on its own, could undercut Microsoft’s AI edge, especially as rivals like Google, Anthropic, and Meta have become better and better over the past few months.
There’s also a big question hanging over all of this: regulation. If OpenAI decides to file an antitrust complaint, it could open the door to a wider investigation into how deals between cloud giants and AI firms are made. That could mean new scrutiny on profit-sharing arrangements, IP lockups, and compute dependencies. That’s not not just for Microsoft, but for every major player in the space.
If OpenAI manages to loosen Microsoft’s hold, it might change the playbook for other startups working with massive tech companies. It could give smaller players a path to stay independent, while still accessing resources. That kind of shift might also push more AI labs to spread out their cloud dependencies and push back harder on unfair terms.
On the flip side, a high-profile legal battle might bring regulatory attention to how much power a few companies hold over compute access and model distribution. Lawmakers have already started looking at concentration in AI development. This case could become a flashpoint.
Is a Deal Still on the Table?
Even with all the friction, neither side has walked away just yet. In joint statements, both Microsoft and OpenAI insist that talks are ongoing and they’re optimistic about “continuing to build together for years to come.” People close to the situation say the same, even though both teams seem to be quietly preparing for what happens if talks fall through.
Microsoft is hedging. It’s expanding its in-house AI team, signing deals with other model providers like Grok, and signaling it can survive without exclusive OpenAI access. OpenAI is diversifying its cloud stack, bringing in new investors, and laying the groundwork for a public-benefit corporate structure that could unlock billions.
A breakup would be messy and expensive. Both companies have built massive systems, and public expectations, on the strength of this partnership. A negotiated deal is still the path of least resistance. But if they can’t reach one, it could lead to a major lawsuit that changes how AI deals are made for years.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
