Microsoft and OpenAI Reportedly Feuding Over AGI Contract Clause
One of the most influential partnerships in the AI industry may be facing a serious contractual rift, as Microsoft and OpenAI are reportedly at odds over access to artificial general intelligence (AGI).
At the heart of the dispute is a clause in their agreement that voids Microsoft’s access to AGI if and when OpenAI achieves it—a condition Microsoft now wants removed. So far, OpenAI has refused to amend the clause, sources said
Ongoing Tensions in a Landmark AI Partnership
Despite the apparent strain, both companies maintain a publicly united front, releasing a joint statement to Reuters that read:
“We have a long-term, productive partnership that has delivered amazing AI tools for everyone. Talks are ongoing, and we are optimistic we will continue to build together for years to come.”
Still, the report indicates that the Microsoft–OpenAI partnership, once hailed as a model of collaboration in the AI space, is now navigating contractual disagreements at the highest level of innovation—the race to AGI.
OpenAI’s Corporate Structure Shift Requires Microsoft Approval
Adding further complexity, OpenAI is currently transitioning into a public-benefit corporation, a move that reportedly requires Microsoft’s approval. According to sources, the companies have not yet reached an agreement, even after months of negotiations. This potential impasse could have serious implications for both parties’ ambitions in next-generation AI technologies.
Background: Microsoft and OpenAI’s $1 Billion Alliance
The partnership between Microsoft and OpenAI began in 2019, when Microsoft invested $1 billion to support OpenAI’s mission to develop safe and scalable artificial intelligence. Since then, Microsoft has integrated OpenAI’s models into its Azure cloud services, Copilot tools, and enterprise AI offerings. However, the growing strategic importance of AGI—which aims to create machines capable of performing any intellectual task a human can—has raised the stakes significantly.
AGI Tensions Could Redefine AI Collaboration Models
As both Microsoft and OpenAI position themselves at the forefront of artificial intelligence innovation, their current disagreement could influence not only their future collaboration but also how tech giants approach AGI development and AI governance.
With negotiations ongoing, industry watchers are closely monitoring whether this once-historic alliance will remain intact or shift due to philosophical and strategic differences over AGI.
