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Title: OpenAI Weighs 'Nuclear Option' of Antitrust Complaint Against
Microsoft

Link: https://yro.slashdot.org/story/25/06/17/20920...

An anonymous reader quotes a report from Ars Technica: OpenAI executives have
discussed filing an antitrust complaint with US regulators against Microsoft,
the company's largest investor, The Wall Street Journal reported Monday,
marking a dramatic escalation in tensions between the two long-term AI
partners. OpenAI, which develops ChatGPT, has reportedly considered seeking a
federal regulatory review of the terms of its contract with Microsoft for
potential antitrust law violations, according to people familiar with the
matter. The potential antitrust complaint would likely argue that Microsoft
is using its dominant position in cloud services and contractual leverage to
suppress competition, according to insiders who described it as a "nuclear
option," the WSJ reports. The move could unravel one of the most important
business partnerships in the AI industry -- a relationship that started with
a $1 billion investment by Microsoft in 2019 and has grown to include
billions more in funding, along with Microsoft's exclusive rights to host
OpenAI models on its Azure cloud platform. The friction centers on OpenAI's
efforts to transition from its current nonprofit structure into a public
benefit corporation, a conversion that needs Microsoft's approval to
complete. The two companies have not been able to agree on details after
months of negotiations, sources told Reuters. OpenAI's existing for-profit
arm would become a Delaware-based public benefit corporation under the
proposed restructuring. The companies are discussing revising the terms of
Microsoft's investment, including the future equity stake it will hold in
OpenAI. According to The Information, OpenAI wants Microsoft to hold a 33
percent stake in a restructured unit in exchange for foregoing rights to
future profits. The AI company also wants to modify existing clauses that
give Microsoft exclusive rights to host OpenAI models in its cloud. The
restructuring debate attracted criticism from multiple quarters. Elon Musk
alleges that OpenAI violated contract provisions by prioritizing profit over
the public good in its push to advance AI and has sued to block the
conversion. In December, Meta Platforms also asked California's attorney
general to block OpenAI's conversion to a for-profit company.

Read more of this story at Slashdot.

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