Microsoft is prepared to walk away from high-stakes negotiations with OpenAI over the future of its multibillion-dollar alliance, as the ChatGPT maker seeks to convert into a for-profit company. The software giant has considered halting complex discussions with the $300bn AI start-up if the two sides remain unable to agree on critical issues, such as the size of Microsoft’s future stake in OpenAI, according to people with knowledge of its plans. In this eventuality, Microsoft would rely on its existing commercial contract to retain access to OpenAI’s technology until 2030, unless there was an offer that was equal to or better than its current arrangements, according to these people. These people stressed, however, that Microsoft was operating in “good faith” and both parties were meeting daily to try to put a plan on the table and were hopeful a deal could be reached. “We have a long-term, productive partnership that has delivered amazing AI tools for everyone,” Microsoft and OpenAI said in a joint statement. “Talks are ongoing and we are optimistic we will continue to build together for years to come.” OpenAI needs a deal with Microsoft to complete a move away from its non-profit origins into a more conventional corporate structure, which it believes will unlock funding and launch an initial public offering. Microsoft must approve the switch by the end of the year or OpenAI risks losing billions of funding from other investors, including SoftBank.

Full report : Microsoft prepared to abandon high-stakes talks with OpenAI.