Life after OpenAI: Microsoft has started hunting for new AI startups, Reuters has found out

Microsoft has begun searching for artificial intelligence startups available for purchase to prepare for a future independent of its most important partner, OpenAI, five sources told Reuters. Three of them said the new deals are designed to help the corporation attract talented developers and realize its stated goal of building its own advanced AI model by next year.

This spring, the tech giant considered buying the startup Cursor, which specializes in AI generation of program code. The deal had to be abandoned due to internal concerns: lawyers felt that the purchase would not pass antitrust regulators' scrutiny, as Microsoft already owns a similar service, GitHub Copilot, according to Reuters' interlocutors.

According to the agency, the corporation is now in talks with the Inception project, which was founded in 2024 by a team from Stanford University and develops an alternative method of creating large language models. At the end of 2025, Microsoft's venture fund - M12 - took part in the seed round of this startup for $50 million. Dialogue continues, but there are no guarantees of successful closure of the deal, and Inception does not comment on the situation, notes Reuters.

Microsoft has to invest in players in an overheated market, where startups get exorbitant valuations and the salaries of AI researchers easily reach tens of millions of dollars a year. The situation is complicated by direct competition for assets with other tech giants, most notably SpaceX, two sources stated. Elon Musk's aerospace company announced a $60 billion deal with Cursor shortly after Microsoft pulled out of negotiations.

Microsoft and OpenAI's partnership began in 2019, when the IT giant invested $1 billion in the then little-known research lab. The release of ChatGPT in late 2022 cemented Microsoft's status as one of the pioneers in AI and fueled dramatic growth in its Azure cloud business.

According to the latest financial statements, Microsoft has transferred to the partner $11.8 billion of the promised $13 billion. At the same time, the total costs of the corporation, including investments in OpenAI, infrastructure and hosting, exceeded $100 billion, as stated in court on Ma 13, the head of corporate development Microsoft Michael Vetter.

The original agreement gave Microsoft exclusive access to the technology and OpenAI stable access to Microsoft's servers for its research. Over time, tensions between the partners increased as both sides grew aggravated by the limitations of the contract. OpenAI's computing needs exceeded what Microsoft could provide, while the corporation itself was expressly prohibited by the contract to create neural networks that could compete with the partner's developments, Reuters points out.

As a result, the companies had to soften the terms of cooperation several times. The End of 2025 Amendments authorized Microsoft to create universal artificial intelligence (AGI), a still theoretical advanced form of AI that is superior to humans in solving complex problems. In late April, the parties entered into a new agreement that gave OpenAI the ability to develop some products with Amazon and other direct competitors of Microsoft.

This article was AI-translated and verified by a human editor