At the heart of the dispute is OpenAI's desire to restructure to a for-profit business, a move that requires Microsoft's approval.

The Wall Street Journal reports that OpenAI may run to the federal government and accuse Microsoft—its own sugar daddy—of anti-competitive practices. Were this to happen, OpenAI execs claim they would seek a federal regulatory review of the terms of the contract between them and Microsoft,

The potential antitrust complaint would likely argue that Microsoft is using its dominant position in cloud services and contractual leverage to suppress competition, according to insiders who described it as a "nuclear option,

Negotiations between Microsoft and OpenAI over the startup’s plan to restructure its for-profit unit, which requires Microsoft’s approval, have entered their eighth month with no end in sight and new conflicts emerging.

Microsoft currently has access to all of OpenAI’s IP, according to their agreement. It offers its own AI coding product, GitHub Copilot, that competes with OpenAI. OpenAI doesn’t want Microsoft to have access to Windsurf’s intellectual property.

CNBC’s Deirdre Bosa reports on the growing rift between Microsoft and OpenAI. Canadian Indigenous leader says he was 'filled with rage' before 'intense' conversation with Trump

OpenAI has told shareholders it wants Microsoft to accept a roughly 33% equity stake in a restructured version of its for-profit business, one of several concessions it wants from its biggest outside shareholder,

OpenAI reportedly considered legal action against Microsoft amid disputes over profit-sharing, equity, and exclusive cloud hosting rights.