Microsoft is prepared to walk away from its high-stakes talks with OpenAI over the future of its multibillion-dollar alliance, the Financial Times reported on Wednesday.

At the heart of the dispute is OpenAI's desire to restructure to a for-profit business, a move that requires Microsoft's approval.

The Wall Street Journal reports that OpenAI may run to the federal government and accuse Microsoft—its own sugar daddy—of anti-competitive practices. Were this to happen, OpenAI execs claim they would seek a federal regulatory review of the terms of the contract between them and Microsoft,