OpenAI Redefines Relationship With Microsoft On Updated Website

A noteworthy change has been made on OpenAI's official website, which previously listed Microsoft as a minority owner.

On the page that summarises OpenAI's structure, the American AI company had previously listed Microsoft as a minority owner. The recently updated page now lists the Redmond-based tech giant as having a minority economic interest.

With multiple governing bodies monitoring the complicated OpenAI-Microsoft relationship, the abovementioned change could turn out to be important. In its latest report, The Financial Times divulged key details about the relationship between the two companies.

The report highlights some key aspects of this relationship such as Microsoft investing billions of dollars in OpenAI and Microsoft's cloud service Azure, which kept profits flowing in tougher times as it was being used as the exclusive cloud partner of OpenAI.

To complicate things further, the recent turmoil at OpenAI saw CEO Sam Atman getting fired by the OpenAI board and receiving an offer to join an advanced AI division at Microsoft before being reinstated as the chief executive of the AI startup.

Interestingly, it is still unclear why Altman was sacked. In fact, former OpenAI director Reid Hoffman recently admitted that he doesn't know why the company's board removed Altman from his CEO position.

While the OpenAI website's structure page confirms Microsoft is "a non-voting board observer and has no control," some parts of the OpenAI and Microsoft relationship are reportedly still confidential. Notably, Microsoft's role in OpenAI has been subject to a lot of speculations, with some reports suggesting the software maker owns part of OpenAI.

Does Microsoft own any part of OpenAI?

Microsoft's recent investment in OpenAI is around $10 billion (about £7.9 billion). According to earlier reports, Microsoft is entitled to up to 49 per cent of the for-profit arm of OpenAI. However, that's not the same as 49 per cent ownership.

Also, the updated OpenAI website confirms that the investment does not result in Microsoft owning part of OpenAI. However, it is quite surprising that OpenAI made such a consequential change without an announcement. In fact, the AI company didn't even update the timestamp of that portion of the site.

The word on the street is that the FTC is currently investigating the relationship between OpenAI and Microsoft, which probably led to the change on OpenAI's website.

The UK Competition and Markets Authority (CMA) is also looking into the controversy-plagued relationship between the two renowned companies. So, it is imperative for both Microsoft and OpenAI to have their ducks in a row beforehand.

While neither of the two companies has explained why the graphic was changed, the Financial Times report suggests the previous chart was incorrect. The report claims OpenAI backers do not own equity shareholdings.

Apparently, OpenAI-backing companies are entitled to a share of profits, but there's an upper limit to how much a backer can earn. It is also worth noting that the sharable profits come from OpenAI's for-profit subsidiary and not the non-profit OpenAI entity, FT reported.