According to The Information, OpenAI has begun selling access to ChatGPT at a reduced price, a move that has negatively impacted Microsoft’s interests. This development comes amid intensifying competition in the artificial intelligence sector, as companies race to offer more affordable and accessible AI solutions for consumers.

Tensions have recently escalated between Microsoft and OpenAI. According to The Wall Street Journal (WSJ), OpenAI is seeking to transition into a for-profit company, which would allow it to go public, expand its customer base, and raise capital for further AI development. However, Microsoft appears reluctant to approve the move, as the transition could significantly undermine its interests—particularly its ability to share OpenAI’s intellectual property.

If OpenAI fails to complete the transition by year-end, lead investor SoftBank may withdraw its $20 billion funding commitment, and the company could even face the risk of a hostile takeover. Under the current agreement, OpenAI requires Microsoft’s approval to proceed with the transition.

With Microsoft delaying approval, the alliance between the two companies has grown strained amid mounting financial stakes. Some OpenAI executives have accused Microsoft of monopolistic practices in their multibillion-dollar partnership, urging U.S. regulators to investigate.

Despite an outwardly harmonious relationship, the cracks had long been forming. In April, OpenAI made the largest acquisition in its history, purchasing Windsurf for $3 billion. Windsurf is seen as equivalent in stature to Microsoft’s GitHub Copilot. Microsoft’s access to OpenAI’s IP also extends to Windsurf. However, sources close to OpenAI claim the company is reluctant to let Microsoft access Windsurf, fearing it would compromise Windsurf’s IP and give GitHub Copilot an unfair advantage.

The dispute also touches on a long-standing disagreement: Microsoft wants continued access to OpenAI’s technology even after the development of artificial general intelligence (AGI). Yet, current terms stipulate that the partnership will automatically terminate upon achieving AGI.

Interestingly, Microsoft recently walked away from two large data center deals, reportedly due to reluctance to support additional ChatGPT training. Nevertheless, OpenAI CEO Sam Altman has claimed the company is no longer constrained by computing resources.

Still, Microsoft CEO Satya Nadella expressed his desire for a long-term relationship with OpenAI. “Every day of success for ChatGPT is a great day for Microsoft,” Nadella added. That’s because each use of ChatGPT appears to generate value for Microsoft.