One of the most successful partnerships in tech history may be nearing collapse, taking Microsoft to court

OpenAI executives are considering filing

antitrust complaints against Microsoft

as tensions over their six-year partnership reach a breaking point, as per a Wall Street Journal report, citing sources familiar with the matter. The AI startup, frustrated with Microsoft's control over its products and computing resources, has discussed what insiders call a "nuclear option" involving federal regulatory review and a public campaign against its tech giant partner.The dispute centers on OpenAI's urgent need to convert into a for-profit company by year-end or risk losing $20 billion in funding. Microsoft's approval is crucial for this conversion, but negotiations have stalled over ownership stakes and access to intellectual property. The Wall Street Journal reports that Microsoft currently demands a larger stake in the new company than OpenAI is willing to provide.

Microsoft's grip on OpenAI technology sparks conversion dispute

The conflict intensified following OpenAI's $3 billion acquisition of coding startup Windsurf. Under their current agreement, Microsoft has access to all of OpenAI's intellectual property and offers competing products like GitHub Copilot. OpenAI now wants to prevent Microsoft from accessing Windsurf's technology while seeking permission to partner with other cloud providers to expand its customer base and computing resources.

Microsoft currently holds exclusive rights to sell OpenAI's software through its Azure cloud platform and serves as the startup's primary compute provider. However, the companies have evolved from partners to competitors, offering rival consumer chatbots and business AI tools. Last year, Microsoft CEO Satya Nadella even hired an Altman rival to secretly develop competing models.

Federal regulators already investigating Microsoft's AI investments

The partnership breakdown comes as federal antitrust scrutiny intensifies. The Federal Trade Commission launched a broad investigation into Microsoft last year and previously examined the company's OpenAI investment alongside other major tech AI deals. The investigation adds weight to OpenAI's potential antitrust strategy against Microsoft.Both companies issued a joint statement emphasizing their "long-term, productive partnership" and expressing optimism about continuing collaboration. However, the fundamental disagreement over artificial general intelligence access, Microsoft wants continued technology access even after OpenAI achieves human-level AI, suggests deeper structural conflicts that may prove impossible to resolve through negotiation alone.