Microsoft is reportedly in a tussle with OpenAI over what size piece it will get of the artificial intelligence juggernaut as the latter prepares to transform itself from nonprofit to for-profit company.

Both firms have turned to investment banks for advice in the high-stakes negotiations as Microsoft seeks a major slug of equity in OpenAI in exchange for the $14 billion in cash it has injected into the company thus far, according to the Wall Street Journal.

Microsoft, headed by CEO Satya Nadella, has hired Morgan Stanley, the paper reported, citing unnamed sources close to the situation.

OpenAI and Microsoft are reportedly in talks about the size of an equity split.

OpenAI — headed by 39-year-old tech tycoon Sam Altman — has meanwhile hired Goldman Sachs, the sources said.

Microsoft is OpenAI’s biggest investor and began its massive cash infusions in 2019.

The company was a participant in a recently closed $6.6 billion fundraising round that valued OpenAI at a whopping $157 billion – even though it is expected to lose $5 billion this year.

Aside from the size of Microsoft’s equity take, the companies are expected to negotiate the extent of its governance rights, the report said.

The Post has reached out to Microsoft and OpenAI for comment.

OpenAI’s board is planning to restructure as a for-profit benefit corporation, in which company leaders weigh both societal impact and profit when making decisions, according to multiple reports.

The nonprofit entity that has governed OpenAI since 2015 will continue to exist and retain a stake in the for-profit entity, but it will no longer be in charge.

OpenAI’s nonprofit board briefly ousted Altman from the CEO job last fall, only to see him retake the helm after Nadella and other key investors intervened.

The jockeying over equity rights is playing out amid signs of behind-the-scenes tension between Microsoft and OpenAI, according to a separate report.

Altman and his allies were miffed at Microsoft’s decision to hire AI pioneer Mustafa Suleyman, the New York Times reported.

Some OpenAI staffers have reportedly bristled at Musfata Suleyman’s involvement at Microsoft.

Suleyman is head of Microsoft’s in-house consumer AI unit and reports directly to Nadella.

Suleyman cofounded the Google-owned DeepMind research lab and later ran the startup Inflection AI. Most of the latter’s staff followed Suleyman to Microsoft.

Some OpenAI staffers bristled at a recent incident in which Suleyman reportedly lambasted the startup for not delivering new AI technology to Microsoft colleagues as quickly as he thought they should, according to the Times.

Others at Altman’s firm were said to be irritated that Microsoft engineers had bypassed mutual agreed protocols while downloading OpenAI software.

Microsoft CEO Satya Nadella intervened when Altman was briefly ousted last year.

Meanwhile, OpenAI has reportedly pushed Microsoft for more favorable terms as it looks to secure more computing power to run its AI programs – and to allow it to seek sources outside the company.

Internal documents obtained by the Times suggest OpenAI’s computing costs will surge as high as $37.5 billion per year by 2029.

Microsoft and other key investors in the most recent fundraising round reportedly have the right to renegotiate OpenAI’s valuation – or receive their money back entirely – if the for-profit shift isn’t complete within two years.

Altman is also expected to receive an equity stake in the for-profit entity – though he pushed back on one Bloomberg report stating that he could receive a 7% slice worth more than $10 billion, calling it “ludicrous.”

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