Why Microsoft Will Likely Keep Its Iron Grip on OpenAI’s Future Profits; Newsom’s Strange AI Veto

As OpenAI nears a much-needed capital raise, some investors in the company have privately voiced hope that its largest shareholder and benefactor, Microsoft, will relinquish its rights to a large share of OpenAI’s future profits—an arrangement that effectively lowers the value of shares held by newer investors.

I wouldn’t bet on it.

Microsoft has the power to veto any proposed changes to those profit rights, and its executives haven’t wanted to change them as part of the funding round, according to someone briefed on the deal talks. Notably, Microsoft’s existing deal with OpenAI protects its rights to future profits even if the startup becomes a for-profit company, as it has been planning to do, according to this person.