OpenAI clashes with Microsoft over AI future, threatens lawsuit

Tensions between OpenAI and Microsoft reach all-time high amid clash over company’s future.

OpenAI and Microsoft have had one of the most successful partnerships in tech history, but recent reports suggest it may be unraveling. According to a June 17 report by The Wall Street Journal, negotiations between the two firms are stalling, and OpenAI is even considering legal action.

Currently, Microsoft is blocking OpenAI’s plans to convert into a for-profit company, a move that would allow it to go public. This roadblock has prompted OpenAI’s leadership to threaten an antitrust lawsuit against Microsoft and call for a review of the contracts between the two firms.

Specifically, Microsoft holds preferential rights to use OpenAI’s technology, as well as the exclusive right to serve as the company’s compute provider. Despite this close relationship, the two companies are increasingly becoming competitors.

For example, Microsoft’s AI coding assistant, GitHub Copilot, competes directly with OpenAI’s Windsurf. Additionally, Microsoft is developing its own large language model, which could eventually reduce its dependence on OpenAI’s ChatGPT.

OpenAI moves toward a for-profit model

The root of the tension lies in OpenAI’s plans to transition from its current capped-profit structure to a for-profit public benefit corporation. This would allow the company to pursue both profit and broader public interest in AI, while also opening the door to a public listing and potential multi-billion-dollar fundraising.

However, OpenAI needs Microsoft’s approval to make the move, as the tech giant is a major investor. In return, Microsoft is reportedly seeking a larger ownership stake in the company than it currently holds.

Since 2019, Microsoft has invested almost $14 billion in OpenAI. It is currently its largest shareholder of OpenAI’s for-profit subsidiary, OpenAI LP, with 49% of the shares. In 2025, Microsoft valued its stake in the company at $147 billion.