Microsoft is reportedly negotiating a new deal with OpenAI to maintain access to the startup’s technology even if OpenAI achieves AGI (artificial general intelligence)—a milestone that, under the current agreement, could terminate Microsoft’s rights.

The negotiations, first reported by Bloomberg, are said to be in advanced stages, with a possible agreement expected in the coming weeks. Citing three anonymous sources, the report states that both companies have been engaged in regular discussions. While the tone has been described as positive, challenges such as regulatory hurdles and Elon Musk’s ongoing lawsuit against OpenAI could complicate the process.

Under the current arrangement, Microsoft’s access to OpenAI’s technology expires in 2030, or sooner if OpenAI declares it has achieved AGI. But AGI remains an ambiguous concept, and no universal definition exists—raising concerns about what happens if OpenAI unilaterally decides the milestone has been met.

Such a declaration could jeopardize Microsoft’s integration of OpenAI models into products like Azure OpenAI Service, Copilot for Windows, Office, and GitHub. Microsoft is seeking terms that would preserve its access to OpenAI’s core technologies regardless of any AGI claims.

At the same time, OpenAI has reportedly informed investors that it expects to pay Microsoft a smaller share of its revenue over time. A source also told Bloomberg that OpenAI is seeking assurances that Microsoft will deploy its technology responsibly, particularly as it approaches AGI-level capabilities.

OpenAI’s hybrid structure, which combines a mission-driven nonprofit with a capped for-profit subsidiary, has long complicated its ability to raise capital and operate like a traditional tech firm. While the company has raised billions and expanded commercially, it remains limited in how much it can scale or return profits to investors.

The new agreement would support OpenAI’s transition to a fully for-profit model. According to Bloomberg’s sources, Microsoft has been a key roadblock in those efforts—using its leverage as OpenAI’s largest backer to negotiate for a greater equity stake, reportedly in the low- to mid-30% range.

This would not only secure continued access to OpenAI’s technology, but also allow Microsoft to receive uncapped financial returns rather than the restricted gains permitted under the current structure.

As part of the ongoing talks, OpenAI is also seeking guarantees that Microsoft will deploy its technology safely, especially as it approaches more advanced capabilities. The startup has reportedly indicated to investors that it expects to pay Microsoft a lower share of its revenue over time.

A restructured agreement could allow both companies to align long-term goals around technical development, commercialization, and responsible deployment—while removing the uncertainty that surrounds the AGI clause in the original deal.

Q: What are Microsoft and OpenAI negotiating?
A: They are discussing a new deal that would let Microsoft retain access to OpenAI’s technology even if the company declares it has achieved AGI.

Q: What does AGI mean in this context?
A: AGI, or artificial general intelligence, refers to a theoretical system with human-level capabilities. OpenAI’s contract with Microsoft allows it to end access upon reaching this milestone.

Q: Why is Microsoft concerned?
A: Microsoft relies heavily on OpenAI’s models across Azure, Windows, Office, and GitHub, and could lose a strategic advantage if access is cut off after an AGI declaration.

Q: What stake is Microsoft seeking?
A: Microsoft is negotiating for an equity stake in OpenAI in the low- to mid-30% range, according to Bloomberg.

Q: What could delay the agreement?
A: Regulatory concerns and Elon Musk’s lawsuit challenging OpenAI’s for-profit transition could complicate or delay a final deal.

This negotiation marks a pivotal moment in the evolving relationship between Microsoft and OpenAI—one that could shape how foundational AI technology is owned, accessed, and monetized in the years ahead. For Microsoft, maintaining access to OpenAI’s models is critical to its enterprise and product strategy. For OpenAI, shedding nonprofit constraints could unlock new growth and investment pathways.

If the agreement succeeds, it may serve as a new blueprint for how major tech firms and AI labs structure long-term commercial and ethical partnerships in a landscape where AGI—however it’s defined—remains both a goal and a governance challenge.

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.