Preliminary Microsoft-OpenAI deal clears way for OpenAI's for-profit conversion

What just happened? Microsoft and OpenAI have reached an agreement to extend their high-profile partnership, resolving months of strained negotiations and clearing the way for the artificial intelligence startup to move forward with its plan to form a for-profit corporation. The non-binding deal represents a potential turning point in one of the most closely watched relationships in the AI sector, though many of the terms have yet to be finalized.

The new arrangement comes after a summer of contentious talks between the two companies, which have long been both collaborators and competitors in the race to develop advanced AI systems.

Microsoft, an early investor in OpenAI, has committed more than $10 billion to the startup since 2019 and has integrated its models into products such as Office, GitHub, and its Copilot chatbot. At the same time, it has insisted on exclusive access to OpenAI's technology for its Azure cloud ...