> and then giving up things produced off that investment when the company grows?
An investor can be stubborn about retaining all rights previously negotiated and never give them up... but that absolutist position doesn't mean anything if the investment fails.
OpenAI needs many more billions to cover many more years of expected losses. Microsoft itself doesn't want to invest any more money. Additional outside investors don't want to add more billions in funding unless Microsoft was willing to give up a few rights so that OpenAI has a better competitive position against Google Gemini, Anthropic, Grok etc.
When a startup is losing money and desperately needs more capital, a new round of investors can chip away at rights the previous investor(s) had. Why would previous original investors voluntarily agree to give up any rights?!? Because their investment is at risk if the startup doesn't get a lot more money. If the original investor doesn't want to re-invest again and would rather others foot the bill, they sometimes have to be a little flexible on their rights for that to happen.
An investor can be stubborn about retaining all rights previously negotiated and never give them up... but that absolutist position doesn't mean anything if the investment fails.
OpenAI needs many more billions to cover many more years of expected losses. Microsoft itself doesn't want to invest any more money. Additional outside investors don't want to add more billions in funding unless Microsoft was willing to give up a few rights so that OpenAI has a better competitive position against Google Gemini, Anthropic, Grok etc.
When a startup is losing money and desperately needs more capital, a new round of investors can chip away at rights the previous investor(s) had. Why would previous original investors voluntarily agree to give up any rights?!? Because their investment is at risk if the startup doesn't get a lot more money. If the original investor doesn't want to re-invest again and would rather others foot the bill, they sometimes have to be a little flexible on their rights for that to happen.