Why OpenAI may be considering antitrust complaint against partner Microsoft

OpenAI's bid for independence is clashing with Microsoft's control over infrastructure, IP, and future AGI access, putting their six-year partnership at risk

The six-year partnership between OpenAI and Microsoft, once hailed as one of the most successful and strategic partnerships in artificial intelligence (AI), is now under severe strain. OpenAI is reportedly considering filing a federal antitrust complaint against Microsoft, accusing the tech giant of wielding monopolistic control over its infrastructure, products, and future, according to The Wall Street Journal.

 

At stake is not just a business deal, but a broader battle over who controls the future of AI. If the standoff escalates, it could lead to legal action, regulatory intervention, or even the collapse of a relationship that has shaped the commercial AI landscape since 2019.

 

Why OpenAI and Microsoft's partnership is under stress

The conflict appears to centre around three interrelated issues: OpenAI’s planned corporate restructuring, Microsoft’s extensive control over its operations, and rising competition between the two tech firms.

 

OpenAI, currently governed by a nonprofit board, is trying to convert into a public-benefit corporation, a move that would allow it to raise up to $20 billion in new funding and possibly prepare for a future public listing. But Microsoft, its largest backer and primary infrastructure partner, holds veto power over this conversion under existing agreements. Negotiations have stalled, and OpenAI now faces a year-end deadline to complete the restructuring or risk losing access to future capital.

 

The core of the tension is control. Microsoft wants to preserve its preferential access to OpenAI’s cutting-edge models, including any future breakthroughs in artificial general intelligence (AGI), a milestone that, under current terms, would trigger the automatic end of the partnership. 

 

OpenAI, on the other hand, wants greater independence: the ability to work with other cloud providers, market its products directly to customers, and protect proprietary technologies such as those developed by Windsurf, a $3 billion coding startup it recently acquired.

 

Microsoft already has its own competing AI offerings, such as GitHub Copilot, and is seeking access to Windsurf’s intellectual property under the existing partnership terms. OpenAI is resisting, arguing that such access would give Microsoft an unfair advantage and further blur the lines between partnership and rivalry.

 

OpenAI considers antitrust complaint, regulatory scrutiny against Microsoft

In recent weeks, OpenAI executives have reportedly discussed filing an antitrust complaint with US regulators, which some insiders have called a “nuclear option”. Such a move would accuse Microsoft of using its dominant position in cloud services and contractual leverage to suppress competition and dictate the terms of innovation.

 

The US Federal Trade Commission is already investigating Microsoft’s AI investments, including its stake in OpenAI, as part of a broader review of Big Tech consolidation. A formal complaint by OpenAI would increase regulatory scrutiny and could lead to further restrictions on Microsoft’s influence over AI development.

 

Alongside this, OpenAI has also explored the idea of launching a public pressure campaign to build support for regulatory intervention.

 

OpenAI-Microsoft partnership

The OpenAI-Microsoft partnership began in 2019, when Microsoft invested $1 billion in OpenAI and became its exclusive cloud provider through Azure. That investment later grew to an estimated $13 billion, largely in the form of cloud credits. In exchange, Microsoft received early and preferential access to OpenAI’s models, which it embedded into its own products, including Bing, Microsoft 365 Copilot, and GitHub Copilot.

 

The companies described the arrangement as a 'capped-profit' model, with OpenAI retaining its nonprofit governance while commercialising its technologies through Microsoft.

 

That relationship has since evolved. Microsoft has become more assertive, hiring its own in-house AI talent and building proprietary models that compete directly with OpenAI’s. It has also asked for a larger stake in the restructured company than OpenAI is willing to offer.

 

Though allowed to build its own data centre project (known as Stargate) under a 2023 agreement, OpenAI remains heavily reliant on Microsoft’s infrastructure. The startup now wants to work with other cloud providers like Google and Amazon to diversify its computing base and reach new customers, something Microsoft is resisting.

 

Ongoing talks with high stakes for AI governance

OpenAI and Microsoft both continue to say that talks are ongoing. In a joint statement, the companies described their relationship as “productive” and said they were optimistic about future collaboration.

 

With billions of dollars, critical IP, and the shape of AI governance on the line, the outcome of this standoff could set the tone for how AI partnerships are formed, managed, and regulated in the future.