TechCheck OpenAI and Microsoft’s uneasy truce 9/12/25
Sep 12, 2025
Mackenzie Cagallus, a tech reporter, dives into the transformative deal between OpenAI and Microsoft. She discusses how this agreement could pave the way for OpenAI's for-profit shift, potentially unlocking billions. The conversation also touches on OpenAI's prospects for going public, the impact of legal challenges from figures like Elon Musk, and what this means for talent acquisition and competition in the tech landscape. The partnership's implications for Microsoft Azure and its rivalry with Oracle also take center stage.
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Deal Converts Stakes And Tightens Ties
- OpenAI and Microsoft struck a tentative deal that converts Microsoft's startup stake into conventional equity and gives OpenAI's nonprofit a $100 billion stake.
- The agreement tightly intertwines their futures while clarifying ownership and unlocking new funding paths for OpenAI.
Mutual Leverage And Market Dynamics
- Microsoft remains heavily vested: Azure growth benefited from serving OpenAI's compute needs and will hold roughly a third of OpenAI's equity.
- Both sides gain strategic leverage as OpenAI pressures Google and Microsoft balances partnerships and rivals.
Strategic Competitive Alignment
- Even without explicit concessions, Microsoft benefits from OpenAI bringing competitive pressure to Google's core Search and enterprise software market.
- The alliance creates an 'enemy of my enemy' dynamic that aligns Microsoft and OpenAI against Alphabet.