#### OpenAI and MS Face a New Phase in Equity and Profit Sharing Negotiation

Background and Current Status of Negotiations

Over the past eight months, negotiations between OpenAI and Microsoft (MS) regarding the conversion to a public interest corporation have been challenging. OpenAI proposed that in exchange for providing MS with 33% of the shares of the reorganized for-profit sector during the corporate restructuring process, MS would waive various rights, including the distribution of future profits. On the other hand, MS, having already solidified its position with an investment of over $13 billion, is strongly demanding the right to use AI models under the existing contract and an extension of the technology usage agreement beyond 2030.

Key Negotiation Terms and Issues

1. Conditions for Equity Exchange and Profit Sharing Waiver
   OpenAI has proposed granting MS 33% of the shares in the reorganized for-profit sector in exchange for MS waiving various rights, including future profit rights and AI model usage rights until 2030. Consequently, MS finds it difficult to accept being forced to give up some of its shares in addition to its existing investment and technology usage rights.

2. Demand for Abolition of Cloud Exclusivity Clause
   OpenAI is seeking to eliminate the exclusive hosting clause included in its existing contract with MS and to be able to autonomously distribute services to other cloud companies such as Google and Amazon. This appears to be intended to promote fair competition and diversify cloud services in the artificial intelligence market in the future.

3. Exclusion of Special Technologies and Related Startup Models
   With the recent acquisition of AI coding startup Windsurf, OpenAI is strengthening conditions to protect its technology and IP, requiring that MS not use Windsurf's models as well.

Future Prospects and Economic/Financial Impact

The outcome of this negotiation is expected to have repercussions not only in the artificial intelligence industry but also in the broader economy and financial markets.

• In the process of strategic investment and restructuring between companies, the outcome of negotiations between OpenAI and MS could significantly impact the competitive landscape of global IT companies.
• If the negotiations fail, there is a risk of losing a substantial planned investment from SoftBank (approximately half of $40 billion), which could negatively affect the company's financial stability.
• Meanwhile, with the disclosure of moves by rival companies such as Google and Amazon to service OpenAI's technology, competition in the artificial intelligence market is expected to intensify further.

The ongoing negotiations are not merely a matter of technology and usage rights but are emerging as an important issue regarding strategic investment and corporate value restructuring in the global economic and financial markets. It is time to pay attention to how key economic, financial, investment, market, and corporate keywords will affect future changes in the IT industry and the artificial intelligence ecosystem depending on the outcome of this negotiation.

*Source URL:
https://share.google/6JALl0kPramRvN59o