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OpenAI Considers Antitrust Action Against Microsoft Over AI Partnership
Executives at OpenAI have reportedly considered accusing Microsoft, its primary financial backer, of engaging in anti-competitive practices related to their partnership in the artificial intelligence (AI) space. According to the Wall Street Journal, citing individuals familiar with the deliberations, OpenAI’s potential actions could involve seeking federal regulatory scrutiny of their agreement’s terms for possible antitrust violations and even launching a public awareness campaign.
Such a maneuver could potentially destabilize one of the most significant technology alliances within the rapidly evolving AI industry.
Potential Actions and Motivations
OpenAI’s pursuit could entail requesting a federal regulatory investigation into the particulars of its arrangement with Microsoft, examining potential infringements of antitrust regulations, alongside a possible public relations initiative, as indicated in the report.
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The company requires Microsoft’s consent to finalize its transition to a public-benefit organization. However, consensus on the specifics has remained elusive despite months of discussions, according to sources.
The companies are reportedly in talks to revise the terms of Microsoft’s investment, specifically concerning its prospective equity stake in OpenAI, sources familiar with the matter have stated.
“Negotiations are still underway, and both companies express optimism about continuing their collaboration in the coming years,” representatives from both entities conveyed to the WSJ via a joint statement. Neither party responded promptly to requests for comment from Reuters.
Background of the OpenAI-Microsoft Partnership
- Microsoft initially invested $1 billion in OpenAI in 2019.
- The investment aimed to bolster OpenAI’s AI technology development on Microsoft’s Azure cloud platform.
- This early investment positioned Microsoft favorably in the AI sector and significantly aided both companies in establishing themselves as leaders in the field.
OpenAI Seeks Independence
OpenAI has been exploring avenues to diminish its dependence on Microsoft. Earlier this month, Reuters reported that the company intends to incorporate Alphabet’s Google Cloud services to accommodate its expanding computational demands.
Microsoft’s Efforts Toward Independence
Microsoft has also been proactively establishing greater autonomy. Reuters reported last year that the company has been integrating internal and third-party AI models to enhance its flagship AI product, Microsoft 365 Copilot, which currently relies heavily on OpenAI.
Previous Regulatory Scrutiny
Prior antitrust concerns have already led Microsoft to make concessions. In response to antitrust scrutiny in both the US and the UK regarding its influence over OpenAI, Microsoft relinquished its observer seat on OpenAI’s board last year.