Microsoft’s partnership with OpenAI is on the rocks

Microsoft’s joint venture with OpenAI, the developer of ChatGPT, appears to be in trouble. What now for the two groups?

Microsoft Chairman and CEO Satya Nadella speaks with OpenAI CEO Sam Altman
(Image credit: JASON REDMOND/AFP via Getty Images)

For six years, the alliance between Microsoft and OpenAI, developer of ChatGPT, has been “one of the most successful partnerships in tech history”, says Berber Jin in The Wall Street Journal. Microsoft’s investment provided funding that fuelled OpenAI’s ascendancy in exchange for early access to OpenAI’s technology and nearly half of any profits. But now the relationship may be on the rocks. The two firms are at loggerheads over OpenAI’s $3 billion acquisition of the coding start-up Windsurf, which competes directly with Microsoft. And negotiations over OpenAI’s conversion into a for-profit company have stalled.

Even before this “behind-the-scenes dogfight”, the relationship between Microsoft and OpenAI was “already fraught”, say Bloomberg’s Brody Ford and Shirin Ghaffary. While it has put $14 billion into OpenAI, Microsoft has also backed rival AI start-ups and begun to construct its own AI models. OpenAI, meanwhile, has signed deals with “rival cloud-computing partners and spent much of the past two years building out a suite of paid subscription products for businesses, schools and individuals”.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri