New Delhi, May 12: Sam Altman's OpenAI and Microsoft are reportedly working on updating their multi-billion-pound partnership. Microsoft is OpenAI’s biggest backer, reportedly investing over USD 13 billion in the company. They aim to change the terms and conditions of their strategic collaboration as OpenAI prepares for a possible initial public offering (IPO).

As per a report of Financial Times, OpenAI is currently in negotiation with one of its biggest investors and partners, Microsoft. Satya Nadella-run Microsoft, OpenAI's largest investor with over USD 13 billion in funding, is reportedly holding back the AI firm’s USD 260 billion restructuring plan. A key concern is determining how much equity Microsoft would receive in the structured group. Google Sued by Mexico Over Labelling of Gulf of Mexico As ‘Gulf of America’, Change Made by Donald Trump, Says President Claudia Sheinbaum.

As per reports, OpenAI and Microsoft are also updating the terms of an  agreement that was established when Microsoft initially invested USD 1 billion in OpenAI back in 2019. The contract, which is set to last till 2030, covers Microsoft's access to OpenAI's select intellectual property, which include its models and products. Additionally, it also includes revenue share from product sales.

The negotiations can be vital for OpenAI as it seeks to reorganise itself. Recently, the company decided to abandon its plan to move away from the non-profit board. However, OpenAI still aims to transition into a public benefit corporation. Competitors such as Anthropic and Elon Musk's xAI have already adopted this structure. The shift is said to be key demand from investors and is essential for making a future IPO possible. Google Seeks South Korea’s Approval To Transfer High-Precision Map Data Overseas Amid National Security, Decision Expected by August.

Microsoft is reportedly willing to give up part of its equity stake for access to new technologies developed after 2030. OpenAI's CEO, Sam Altman, has also expressed his ambition to advance even further by creating artificial general intelligence, which would involve systems that exceed human capabilities. If OpenAI reaches an agreement with Microsoft, it still has challenges ahead. The company has committed to maintain non-profit board by granting substantial equity stake in the public benefit corporation and the power to nominate its directors.

(The above story first appeared on LatestLY on May 12, 2025 10:37 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).