To ease a future IPO, OpenAI is renegotiating its contract with Microsoft, with an emphasis on stock for Microsoft's $13 billion investment. Along with negotiating growing rivalry and difficulties about partnership dynamics, the two businesses are also updating an earlier agreement.

In a high-stakes discussion, OpenAI is presently reworking the terms of its deal with Microsoft in order to facilitate the AI startup's prospective IPO, the Financial Times said. Microsoft is notably one of the largest opponents of OpenAI's newly revealed intentions to convert its for-profit division into a public benefit organization.

According to reports, the main point of contention in the talks is how much stock Microsoft would get in the new company in return for its investment of more than $13 billion in OpenAI. The two businesses are also reportedly reviewing the conditions of an earlier contract that was created when OpenAI got its first $1 billion investment from Microsoft in 2019.

According to the terms of the existing agreement, Microsoft will have access to OpenAI's intellectual property, including its new models and products, and will also get a portion of the company's product sales income through 2030. But in exchange for using the ChatGPT maker's technology until the 2030 deadline, Microsoft is now prepared to forgo a portion of the ownership share it would receive in OpenAI's new for-profit company.

In addition to giving the AI firm enormous amounts of processing capacity to train its AI models, Microsoft has made extensive use of OpenAI's technology in its software products.