Microsoft’s dealings with OpenAI still need a lot more sunlight

WALL STREET JOURNAL

Microsoft finally has opened up a little bit about its dealings with OpenAI. It still has a long way to go to do right by investors.

Here is the rub: Microsoft in its financial reports identifies OpenAI as an equity-method investment. That means OpenAI, by definition, is a related party of Microsoft under the accounting rules, and that Microsoft has the ability to exercise significant influence over the ChatGPT developer. Once again, however, Microsoft in its latest quarterly report didn’t include any related-party disclosures regarding OpenAI.

The lack of information would be defensible if the two companies’ transactions were too insignificant to matter. However, it has become apparent that their dealings are quite material and that investors care tremendously about them.

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