$13B, a custody battle over the AI kid, and one hell of a prenup rewrite… 

Microsoft and OpenAI are renegotiating their deal… again… and it’s a bit uglier than anyone at either company will admit on record. Why? Because two partners aren’t just tweaking a contract here… it’s a full blown power struggle between a trillion-dollar software kingpin and an AI lab that wants to act like it’s the Second Coming of Christ (but structured like a nonprofit run by a board of confused philosophy majors and one guy who got fired and unfired in the same weekend). 

(Source: Giphy) 

In short, OpenAI wants to restructure again. They want to turn their business arm into a for-profit public benefit corp, but the nonprofit board keeps control. If that sentence makes your brain hurt, good. That’s the point. It’s designed to be confusing. It’s a governance structure built by people who think shareholder value is a scam and also want to raise billions of dollars. Somehow, that’s working.

Meanwhile, Microsoft, who let me remind you has dumped $13 billion into Sam Altman’s pockets, is being asked to kindly accept less equity in the new structure, while OpenAI shops itself around to Oracle, SoftBank, and any other mega-conglomerate willing to fund its Stargate project. Now here’s why that’s a problem: Microsoft owns 49% of OpenAI’s for-profit entity. Not the whole thing. Not even the majority. And now OpenAI is reportedly offering them even less… less revenue share, less equity, less say in what comes next. Why? Because OpenAI doesn’t want to be a vendor. They want to be a god. And gods don’t answer to Redmond.

(Source: TechCrunch) 

The current contract gives Microsoft access to OpenAI’s tech until 2030. That’s seven years. In tech years, that’s an eternity. But OpenAI’s saying: sure, you can keep access beyond 2030, if you hand over some of your equity now. That’s the extortion: give up ownership so you can keep using the thing you built with us. Basically, Microsoft is being told it can choose between control and access but not both. Pick a lane.

What’s worse, is that OpenAI is now directly competing with Microsoft in the enterprise space. It’s using the infrastructure Microsoft paid for to build products that undercut Microsoft's own stack. Imagine investing billions in your partner, only to find out they’re building a better version of your core product and pitching it to your biggest customers. It’s a declaration of war, and yet, Satya Nadella keeps smiling in public like everything’s fine. It’s not fine. It’s a hostage situation… especially when IPO talks are being whispered. 

(Source: Reuters) 

Simply put, all of this restructuring, all of this dance around equity and governance, is about going public without giving up control. OpenAI wants to sell shares to Wall Street without actually letting anyone steer the ship. They want the money, not the oversight. They want to be a public company that behaves like a religious institution. Meaning, this is what happens when you let idealists raise billions from corporations and then act shocked when those corporations ask to see the receipts. Microsoft thought it was buying into the future of AI. What it bought into was a political minefield dressed up as a research lab, now weaponized by a CEO who knows exactly how much leverage he's sitting on.

Of course, nobody is saying this outloud (except, me), but this is definitely looking like the end of the honeymoon. Microsoft want’s control, but OpenAI wants independence. And both are pretending this is just about contract revisions, when it’s clearly a fight over who gets to own the most powerful technology ever created before anyone sane steps in and regulates it. In the end, we’ll see what the new shared custody looks like, but I wouldn’t be shocked if it gets uglier before all said is done.

(Source: Giphy) 

Meaning, keep your eyes on this story and place your bets accordingly, friends. Microsoft is getting a massive reality check, and it’s not a pretty one. Until next time…

P.S. Oh, I’m sorry, I didn’t know you liked getting rekt. Let’s face it, retail investors get the short end of the stick all day everyday. It’s the smart money’s world, and we are just living in it–only useful when it comes to liquidity purposes in the market. Meaning, if you’re as pissed off as I was when I found out Milli Vanilli was lip syncing the whole time, then it’s time to go from investing blind, to investing smart. Luckily for you, the key is right here as a Stocks.News premium member. Click here to see exactly how our premium members are printing while others quake in the face of today’s market chaos. 

Stocks.News holds positions in Microsoft as mentioned in the article.