Microsoft and OpenAI Clash Over AGI Clause in Partnership Agreement

A key clause in the contract between Microsoft and OpenAI is causing tension between the two companies as they navigate the future of artificial general intelligence (AGI), according to a report from The Information.

Under the current terms of their agreement, Microsoft would lose access to AGI technology developed by OpenAI once it reaches that milestone. Microsoft is pushing for that provision to be removed, but OpenAI has reportedly declined.

Stalled Negotiations Over Corporate Structure

This disagreement comes at a sensitive time for the partnership. OpenAI is seeking Microsoft’s approval to complete its transition into a public-benefit corporation, a legal change that requires sign-off from major stakeholders. However, sources told The Information that despite months of talks, the two sides remain unable to resolve key issues.

Microsoft first invested in OpenAI in 2019, committing $1 billion to help build AI tools on its Azure cloud platform. Since then, the collaboration has been central to the rapid commercialization of generative AI technologies.

Neither company responded to requests for comment from Reuters. However, both have issued general statements in recent weeks, saying that negotiations are still ongoing and that they are optimistic about continuing their long-term partnership.

What This Means

This dispute highlights the growing tension between commercial partnerships and the long-term ambitions of AI development. As companies like OpenAI approach the threshold of AGI—systems capable of human-level reasoning—contracts written years earlier are coming under new scrutiny.

Microsoft, which holds exclusive rights to OpenAI’s models through 2030 and earns revenue from their integration into Azure and other services, stands to lose access once AGI is declared. That clause was built into the original agreement to preserve OpenAI’s control over the deployment of AGI technologies. Now, Microsoft is pushing to revise or remove it, seeking assurances that it won’t be shut out of what could become the most consequential advancement in AI to date.

OpenAI, for its part, appears committed to keeping the clause intact. Doing so would allow its nonprofit board to determine when AGI has been achieved—and how it should be governed. That structure aligns with OpenAI’s founding mission to ensure AGI benefits humanity broadly, not just its commercial partners.

The outcome of these talks could set a precedent for how access to powerful AI systems is controlled, especially when private contracts collide with broader public-interest goals.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.