OpenAI executives have discussed levelling antitrust accusations against Microsoft as a last-ditch option for loosening the firm’s control under their six-year investment deal, the Wall Street Journal reported.

The move could involve seeking a federal regulatory review of the terms of OpenAI’s contract with Microsoft for potential antitrust violations as well as a public campaign, the report said.

A stand-off over the terms of OpenAI’s $3 billion (£2.2bn) acquisition of coding start-up Windsurf is reportedly adding to the difficulties between the companies.

Windsurf acquisition

Microsoft currently has access to all of OpenAI’s intellectual property, but OpenAI does not want it to have access to the IP of Windsurf.

The Windsurf acquisition is intended to improve OpenAI’s coding offerings, which compete directly with GitHub Copilot, a coding product offered through Microsoft subsidiary GitHub.

Microsoft initially invested $1bn in OpenAI in 2019 and invested more than $10bn in early 2023 under a partnership that has propelled both companies into the forefront of the AI industry.

OpenAI needs Microsoft’s approval to go ahead with plans to refashion itself as a public benefit corporation and go public.

More than $20bn in funding is dependent on the corporate conversion, which must take place by the end of the year, adding urgency to the negotiations.

Microsoft has given OpenAI some leeway, allowing it to launch the Stargate data centre project although under their deal Microsoft is supposed to be OpenAI’s sole cloud provider.

Microsoft has diversified its Copilot AI offerings away from sole reliance on OpenAI and last year hired DeepMind co-founder Mustafa Suleyman to lead AI projects at Microsoft that directly compete with OpenAI offerings.

Troubled relationship

OpenAI wants to sell its offerings through cloud providers other than Microsoft Azure to get access to more customers and computing resources, while Microsoft wants to own a larger proportion of OpenAI after its public-benefit conversion than OpenAI is willing to agree to, the WSJ‘s report said.

OpenAI plans to begin offering its products through Google Cloud, Reuters reported last month.

The Federal Trade Commission opened a broad antitrust investigation into Microsoft last year and last year also looked into Microsoft’s relationship with OpenAI as part of a broader probe into such deals.

Microsoft last year gave up its board observer seat at OpenAI amidst UK and US regulatory scrutiny of its influence on the start-up.