The relationship between OpenAI and Microsoft Corporation (NASDAQ:MSFT) is becoming increasingly strained, with OpenAI reportedly contemplating a drastic move in the ongoing negotiations.
The negotiations have entered a pivotal stage, with OpenAI reportedly aiming to reduce Microsoft’s influence over its AI products and access to computing resources, but Microsoft’s consent is pivotal for OpenAI’s transition into a for-profit entity, a change that could facilitate increased fundraising and a potential public listing.
OpenAI and MSFT did not immediately respond to Benzinga’s request for comment.
Why It Matters: Microsoft, once a key driver of OpenAI's early growth in return for priority access to its technology, has now emerged as a rival—adding complexity to ongoing negotiations. The two companies are also in disagreement over the stake Microsoft would hold if OpenAI transitions into a public-benefit corporation.
In May, OpenAI was reportedly in high-stakes negotiations with Microsoft to revise the terms of their multibillion-dollar partnership. A key point of contention was the amount of equity Microsoft would receive in the restructured OpenAI entity in exchange for its over $13 billion investment to date.
OpenAI’s future as a for-profit company is also closely tied to its relationship with Microsoft. The company’s Texas data center expansion was seen as a move to reduce its dependence on Microsoft’s computing resources.
OpenAI’s potential transition into a public-benefit corporation and its IPO ambitions have been a focal point of the negotiations with Microsoft. The outcome of these discussions will shape the future of their partnership and the broader AI industry.
On a year-to-date basis, Microsoft stock surged 14.47%, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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