Negotiations Between Microsoft and OpenAI

Microsoft and OpenAI are currently facing challenges in finalizing the details of a for-profit arrangement, particularly concerning Microsoft's stake in the venture. Key areas under negotiation include the continuation of Microsoft's exclusive cloud provider status, the duration of its rights to use OpenAI's intellectual property, and the retention of a 20% revenue share from OpenAI's earnings. As OpenAI projects significant revenue growth, estimated at $4 billion this year and potentially reaching $100 billion by 2029, the terms of its contractual obligations with Microsoft are becoming increasingly difficult to manage. Failure to resolve these negotiations within a two-year timeframe could lead to claims for the return of investments from their latest capital raise, putting additional pressure on OpenAI to expedite the transition.