Should You Buy, Sell, or Hold MSFT Stock as Microsoft Renegotiates OpenAI Deal?

OpenAI, whose ChatGPT heralded a new era of mainstream adoption of AI, is looking at reviewing its current partnership agreement with its biggest backer, Microsoft (MSFT). As OpenAI mulls an IPO, the company is looking to primarily renegotiate the terms of revenue sharing with Microsoft, as well as the latter’s access to OpenAI’s intellectual property such as models and products. Experts anticipate that OpenAI will seek to cut its revenue share for Microsoft down from 20% to 10%. 

Since its first $1 billion investment in 2019, Microsoft has significantly deepened its backing of OpenAI, bringing its total investment to around $13 billion. OpenAI is now valued at approximately $300 billion.