Tensions are rising between Microsoft and OpenAI, primarily due to OpenAI's demands for increased funding and computing resources.

The New York Times recently reported that the relationship between the two tech giants is deteriorating under various pressures.

In a controversial move, Microsoft hired Mustafa Suleyman from Inflection AI to lead its AI consumer efforts, which has angered OpenAI executives.

This strategic shift involved Microsoft investing $650 million to recruit talent from Inflection, a competitor to OpenAI.

Despite these tensions, both companies continue to benefit from their partnership, with Microsoft gaining access to OpenAI's technologies and OpenAI receiving crucial computing power.

In response to Microsoft's hesitance to provide additional funding, OpenAI signed a $10 billion computing deal with Oracle in June 2024.

This deal allows OpenAI to utilize Oracle's servers while still running Microsoft software, reflecting a desire for greater independence.

Negotiations have intensified regarding Microsoft's equity stake as OpenAI transitions from a nonprofit to a for-profit organization.

Since 2019, Microsoft has invested $13.75 billion in OpenAI, with a recent funding round valuing the startup at $157 billion.

The departure of key Microsoft AI leaders, including Sebastien Bubeck to OpenAI, raises further questions about the stability of their partnership.

OpenAI has been exclusively using Microsoft for cloud computing power, but the dynamics of this relationship are shifting.

OpenAI's board has the authority to determine when Artificial General Intelligence (AGI) is achieved, a decision that CEO Sam Altman admits will be subjective.