OpenAI and Microsoft are negotiating over changes to their partnership, worth more than $13 billion (£9.8bn), to allow the AI start-up to launch a future initial public offering while protecting Microsoft’s access to OpenAI’s future technology, the Financial Times reported.

Microsoft has been holding back OpenAI’s plans to shift to a for-profit corporate structure over questions around how much equity it will receive in exchange for its multibillion investment, the paper said.

The companies are also revising terms of a wider contract agreed when Microsoft first invested $1bn into OpenAI in 2019, according to the report.

Technology access

That contract, which extends to 2030, covers what access Microsoft has to OpenAI’s intellectual property, including models and products, as well as a revenue share from product sales.

Microsoft is reportedly offering to give up some of its equity stake in OpenAI’s new for-profit business in exchange for accessing new technology developed past 2030.

The negotiations are critical to the progress of OpenAI’s shift to a for-profit model, which is a requirement of a $6.6bn funding round from last October in which Microsoft participated, as well as a further $40bn round from March led by SoftBank.

The funding contracts lay out how much equity investors will receive when OpenAI converts to a new structure, and give them the option to recoup some or all of their cash if OpenAI fails to convert to the new structure.

The $260bn start-up has told investors it will share a smaller proportion of revenue with Microsoft, its largest backer, as its restructuring progresses, The Information reported last week.

Changing relationship

In January Microsoft changed some terms of a deal with OpenAI after it entered into a joint agreement with OpenAI, Oracle and SoftBank to build up to $500bn of new AI data centre infrastructure in the US.

OpenAI’s plans to change from a non-profit to a public benefit corporation have received criticism from its initial backers, including co-founder Elon Musk, who say it is straying too far from its original mission of developing AI for the benefit of humanity.

The company last week pulled back from a plan that would have removed ultimate control of the group by its non-profit board.

It said the board would be given a substantial stake in the public benefit corporation and the ability to nominate its directors.