Inside the Battle Over Microsoft’s Access to OpenAI’s Technology
By Ashley Stewart
Business Insider | July 1, 2025
A pivotal partnership in the technology world—the collaboration between Microsoft and OpenAI—is currently facing a complex and high-stakes renegotiation. At the center of this evolving relationship is a key question: exactly what part of OpenAI’s groundbreaking artificial intelligence technology will Microsoft have access to—and when.
A Partnership With Gray Areas
Microsoft’s multibillion-dollar investment in OpenAI has granted the software giant substantial access to the AI startup’s intellectual property (IP), including rights to use and sell the technology via Microsoft’s Azure cloud platform. This access has enabled Microsoft to power products such as its AI assistant, Copilot, and to offer Azure OpenAI services to customers. But the terms embedding this access are proving to be nuanced and sometimes ambiguous.
Insiders reveal that while Microsoft’s agreement entitles it to frequent updates of OpenAI’s core AI models, it does not automatically include every new feature or upgrade built on top of those models. For example, in May 2024, OpenAI publicly demoed a breakthrough voice capability integrated into its GPT-4o model. Although Microsoft CEO Satya Nadella immediately highlighted this innovation during a keynote at Microsoft’s Build developer conference, Microsoft executives reportedly had little advance notice. They learned about the voice technology just days before the demo and had initially no access to the underlying code.
This omission frustrated Microsoft, which soon pressed OpenAI executives, including then-technology chief Mira Murati, for access to the voice technology so that Microsoft could issue its own announcements and keep pace with investor expectations—particularly given the $13 billion Microsoft has invested in OpenAI.
Negotiations Underway
The incident underscores why access to OpenAI’s technology has become a crucial sticking point as the companies negotiate their future partnership. OpenAI is currently seeking corporate restructuring approval from Microsoft, which holds significant contractual advantages: exclusive rights to sell OpenAI’s technology on Azure, first refusal on computing resource provision, and a revenue-sharing agreement that yields billions.
However, OpenAI may have to persuade Microsoft to modify or give up some of these lucrative terms. The talks reportedly involve thorny disputes, including an "existential clause" that OpenAI could activate to block Microsoft’s access to its IP and profits if OpenAI deems it has reached “artificial general intelligence” (AGI). This clause has been called a potential "nuclear option," and OpenAI executives even considered accusing Microsoft of anticompetitive behavior as leverage in negotiations. Microsoft, meanwhile, is said to be preparing for scenarios up to and including walking away from the talks, although sources close to Microsoft suggest that is unlikely given the critical importance of OpenAI’s IP to Microsoft’s AI ambitions.
Intellectual Property: Where the Lines Blur
The main differences revolve around what qualifies as intellectual property and when OpenAI must share updates. Microsoft has received key components like model weights—parameters that govern AI outputs—and inference code, which tells the models how to use data, but certain parts of the technology, such as product design details and user interface features, are excluded from the sharing agreement.
According to insiders familiar with OpenAI, the startup can delay sharing technology updates until they are "finished," a term subject to interpretation. This tactic allows OpenAI to launch new features in parallel with Microsoft but can hamper Microsoft’s ability to develop similar products independently or to integrate features as seamlessly.
Further complicating matters is the fact that even with IP access, Microsoft faces challenges in internalizing and using OpenAI’s technologies. OpenAI has expressed frustration over Microsoft’s requests to explain the code and technical underpinnings in greater detail, while Microsoft employees sometimes struggle to know what specifically to ask OpenAI for.
Microsoft’s AI Strategy and OpenAI Dependence
In 2023, Microsoft formed a dedicated AI division and brought on Mustafa Suleyman, cofounder of DeepMind and former CEO of AI startup Inflection, to lead it. This was widely seen as a hedge against over-reliance on OpenAI, especially following turmoil around OpenAI CEO Sam Altman’s temporary ouster.
Despite these efforts, Microsoft has yet to build AI models that rival OpenAI’s latest frontier systems, focusing instead on smaller, specialized models and enhancements to existing ones. Suleyman’s team has significantly revamped Microsoft’s Copilot application, but growth has been modest. The overall strategy appears to remain deeply dependent on collaboration with OpenAI rather than internal model development on the cutting edge.
Less Pressing Concerns
Other recent headlines around the negotiations—such as fears about OpenAI declaring AGI to cut off Microsoft, OpenAI’s planned acquisition of AI coding assistant startup Windsurf, and potential antitrust accusations—are reportedly less worrisome to Microsoft internally.
For instance, while OpenAI’s proposed purchase of Windsurf would theoretically give Microsoft access to Windsurf’s technology due to the existing agreement, Microsoft is not prioritizing this access and may allow a carve-out for Windsurf’s IP in updated deals. Meanwhile, alleged antitrust concerns have already been reviewed by regulators in the EU and UK, and Microsoft appears confident about compliance.
OpenAI’s push to restructure partly stems from investor SoftBank’s deadline—which reportedly threatens to withhold funding if new agreements are not finalized by year-end. However, given SoftBank’s risk-taking reputation and CEO’s interest in OpenAI, industry watchers doubt that funding will be cut off abruptly.
Looking Ahead
Both companies have emphasized their commitment to ongoing talks. A joint statement released recently reads, "Talks are ongoing and we are optimistic we will continue to build together for years to come."
For Microsoft, walking away would jeopardize access to some of the most advanced AI technology available today, while for OpenAI, Microsoft remains a critical partner and customer. The final terms of the renegotiated deal could redefine the power dynamics between two of the most influential players in artificial intelligence, with broad implications for the future of AI innovation and commercialization.
Contact: Ashley Stewart at astewart@businessinsider.com or Signal +1-425-344-8242
Note: This article is available exclusively to Business Insider subscribers.
