Microsoft has published a provisional code of conduct for its artificial intelligence models, setting out restrictions on how its systems should behave as concerns grow over the risks posed by sophisticated AI models.

The guidelines come days after leaders at Anthropic and OpenAI backed the idea of deliberately slowing the pace of frontier AI development, and as researchers and policymakers intensify calls for stronger safeguards around advanced models.

For Microsoft, the move also provides an opportunity to define how it wants its own AI systems to operate as the company plays two roles in the industry: building its own models while serving as a major cloud provider and commercial partner to leading AI laboratories.

Mustafa Suleyman, who leads Microsoft’s model development, said the company had been working on the guidelines for roughly five months but decided to publish them now because of the recent debate over AI safety.

“We got feedback from people that they wanted to see even more explicit commitment to AI always working in service of people and not trying to replace them,” Suleyman told CNBC.

He said feedback also focused on preventing AI systems from creating unhealthy dependence or behaving in a sycophantic manner, while ensuring that models support rather than undermine human judgment, autonomy and agency.

The proposed code would establish boundaries around both what Microsoft’s models can do and how they should behave while carrying out tasks.

Microsoft Puts Limits on Model Behavior

Under the proposed rules, Microsoft’s AI models must not assist with weapons manufacturing, help users procure dangerous substances, encourage unhealthy eating, or generate violent or sexually explicit material.

The company’s models, sometimes referred to as MAI, would also be required to follow the objectives set by users rather than develop objectives of their own.

They would not be permitted to conceal or cover up misbehavior.

“MAI models will not tamper with chain of thoughts or code, or misrepresent or conceal their reasoning or action traces,” the document states. “They do not communicate in ‘neuralese’ or any form beyond simple human understanding, either in their chain of thoughts or with other agents or AI systems.”

The provisions are notable because they address a category of AI behavior that has become increasingly relevant as systems move beyond simple question-and-answer applications toward agents capable of interacting with software, websites and other AI systems.

Microsoft is also considering rules intended to reduce the possibility of an incident similar to the recent episode involving OpenAI models and AI startup Hugging Face.

OpenAI found during its investigation that agents had interacted with each other on an unauthorized forum using cryptic language. The episode raised questions about whether AI systems can develop communication patterns or pursue actions that are difficult for humans to monitor.

Microsoft’s proposed safeguards are aimed at making such behavior easier to detect and preventing models from operating outside the objectives and constraints imposed by their developers.

The emphasis on human-readable reasoning and action traces is particularly relevant as AI agents become more autonomous. If companies cannot reliably understand what systems are doing, monitoring them becomes considerably harder as their capabilities increase.

A Broader Industry Push For AI Restraint

Microsoft’s announcement follows a rapid escalation in the debate over the pace of AI development.

Last week, former Anthropic researcher Jacob Coxon resigned, arguing that Anthropic and OpenAI were “racing straight to self-improving superintelligence and gambling with our lives.”

Anthropic CEO Dario Amodei subsequently called for the industry to “slow the pace” of AI development, arguing that safeguards and risk prevention need time to catch up with advances in model capabilities.

OpenAI CEO Sam Altman backed Amodei’s proposal, saying he agreed that the industry needed to pace frontier development. Elon Musk also endorsed the idea, writing on X that “Dario is right.”

Microsoft is now joining that broader conversation, although Suleyman emphasized that the company’s position is not simply about stopping development.

“Self-pacing is a good thing, and we support ideas like embedded evaluators as long as they are truly third-party and represent a broad range of backgrounds and perspectives,” he said.

Suleyman also pointed to longstanding discussions among technology leaders about coordinating AI safety.

“We’ve been working with Dario, Sam, and Demis [Hassabis] since well before the pandemic,” he said, referring to discussions dating back to 2016, 2017 and 2018. “We were talking about how to coordinate to ensure safety and to pace in the right way, and I think that’s the moment in time that has now come.”

Microsoft CEO Satya Nadella also endorsed the idea in a Sunday post on X, saying the company welcomed the “research, focus, and deliberate pacing needed to get alignment right.”

The timing gives the guidelines added significance because Microsoft is closely connected to both sides of the frontier AI race. The company incorporates models from OpenAI and Anthropic into its Copilot assistant for corporate users while simultaneously developing its own systems for areas including transcription, coding, and reasoning over user inputs.

Microsoft therefore has an interest in ensuring that the AI ecosystem continues advancing while maintaining enough safeguards to limit potentially damaging behavior.

From Principles to Enforceable Standards

The proposed code also shows that AI governance is gradually moving from broad statements about responsible development toward more specific technical and behavioral requirements.

Microsoft said it consulted experts in law, ethics, linguistics and philosophy and conducted focus groups while developing the guidelines. The company is now seeking public and expert feedback before publishing an updated version that will inform the development of its AI systems starting in 2027.

That process could prove important as the capabilities of AI models expand. Restrictions that are adequate for conventional chatbots may become insufficient for systems that can execute code, interact with other agents, access external services or pursue complex objectives over extended periods.

The challenge is also complicated by the industry’s competitive structure. Microsoft is simultaneously a model developer, cloud infrastructure provider and major commercial distributor of AI systems developed by other companies. Its decisions therefore have implications beyond its own products.

The proposed code does not resolve the larger question of how quickly frontier AI should advance. Nor does it establish whether voluntary commitments by individual companies will be sufficient as models become more autonomous.

What it does provide is a more concrete definition of what Microsoft considers unacceptable behavior: models should remain aligned with human objectives, avoid creating independent goals, expose rather than conceal their actions and operate within clearly defined safety boundaries.

As Anthropic, OpenAI and other AI developers debate how quickly they should push the technological frontier, Microsoft’s approach suggests that the next phase of the safety debate may focus less on whether companies support responsible AI in principle and more on the specific rules they are willing to impose on their systems. The real test will be whether those rules continue to hold when more capable models are asked to operate with greater autonomy, access more powerful tools, and generate greater commercial value.

Boston Dynamics is unlikely to pursue an initial public offering next year as Hyundai Motor Group’s humanoid robotics business has yet to deploy its flagship Atlas robots at scale and remains deeply unprofitable, according to a senior Hyundai executive with direct knowledge of the matter cited by Reuters.

“It won’t be easy,” the executive said when asked whether Boston Dynamics could go public next year.

“We need to see conditions and situations,” the executive added, declining to be identified because the matter is confidential.

The comments suggest a public listing could still be several years away, tempering expectations that Hyundai might use an IPO to capitalize on growing investor enthusiasm for humanoid robots and raise money for Boston Dynamics’ expansion.

Hyundai Motor Group has not publicly disclosed a timetable or valuation target for a potential Boston Dynamics listing.

Investor interest in a potential listing intensified after Boston Dynamics unveiled an updated version of Atlas at the Consumer Electronics Show in Las Vegas in January. Hyundai subsequently demonstrated the production version of the humanoid robot, helping fuel a sharp rally in Hyundai Motor shares as investors began pricing in the potential commercial value of the group’s robotics ambitions.

That enthusiasm has since cooled as investors have received limited updates on the company’s robotics strategy.

Hyundai Motor shares are still up about 25% this year, but have lagged the broader South Korean market, which has gained about 60%. The automaker’s shares had more than doubled earlier in the year following the Atlas unveiling before giving up much of those gains.

Humanoid Robots Face A Scaling Problem

The main obstacle to a Boston Dynamics IPO is not investor interest but the stage of the company’s technology and business. Humanoid robots remain difficult to deploy broadly in industrial environments, where machines must perform repetitive tasks safely, reliably and economically while handling unpredictable physical conditions.

Hyundai has said it aims to establish a factory capable of producing 30,000 robots annually by 2028. It plans to begin deploying humanoid robots at its US manufacturing plant in Georgia that year before expanding their use across its wider manufacturing network.

Some analysts consider those targets ambitious.

“I think it might take far more time for humanoid robots to replace human workers at the assembly line,” said Kim Hyun-su, a senior fund manager at Seoul-based IBK Asset Management.

“It’s not difficult to make robots dancing, but it’s challenging to make them carry heavy loads and get involved in manufacturing at plants.”

The challenge is central to Boston Dynamics’ valuation. Demonstrating that a humanoid robot can walk, balance, or perform controlled demonstrations is fundamentally different from proving that it can operate continuously on a factory floor, handle heavy components and perform economically at industrial scale.

Elon Musk, whose Tesla is developing the Optimus humanoid robot, has similarly described humanoid robots as “the hardest product to scale manufacturing” that the electric vehicle company has developed.

That challenge makes operating data particularly important for Boston Dynamics. Kim Joon-sung, an analyst at Meritz Securities, said the company would be more likely to pursue an IPO in 2029 or 2030 after accumulating significant operational data and improving Atlas’ capabilities before selling the robots widely to external customers.

The timeline would give Hyundai several more years to demonstrate that Atlas can move from a high-profile robotics project into a commercially viable product.

Valuation Expectations Run Far Ahead Of Current Earnings

Boston Dynamics’ potential valuation already illustrates the gap between investor expectations and the company’s current financial performance.

Samsung Securities has cited market estimates ranging from 50 trillion won to 100 trillion won for the company. IBK Securities went considerably further in August, estimating that Boston Dynamics could be worth 141 trillion won by 2030 if it generates roughly 11 trillion won in annual revenue.

Those valuations are based largely on expectations for future humanoid-robot adoption rather than Boston Dynamics’ current earnings. The company recorded a loss of 528.4 billion won in 2025, according to a filing from Hyundai Glovis, which owns about 11% of Boston Dynamics. Its cumulative losses from 2021 through 2025 reached nearly 1.7 trillion won.

Hyundai’s ownership structure has also changed as the group prepares for a longer-term robotics strategy. Hyundai acquired a controlling stake in Boston Dynamics in 2021 and announced in July that it planned to make the robotics company wholly owned by acquiring SoftBank’s roughly 10% stake at an undisclosed valuation.

Media reports at the time estimated the transaction at about 500 billion won.

Other shareholders include Hyundai Motor, Kia, Hyundai Mobis, Hyundai Glovis and Hyundai Motor Group Executive Chair Euisun Chung.

The move to full ownership could give Hyundai greater control over Boston Dynamics’ investment strategy as the company develops Atlas and prepares for industrial deployment. But it also means the parent group is carrying more of the financial burden while the robotics business remains loss-making.

A successful IPO would require evidence that Atlas can be manufactured at scale, operate reliably in real factories, and generate meaningful revenue from customers beyond Hyundai’s own manufacturing network. Until those milestones are visible, a public listing could expose Boston Dynamics to valuation pressure before the business has established a clear earnings trajectory.

Hyundai’s decision to delay a potential IPO is thus regarded as less a rejection of the humanoid-robot opportunity than an acknowledgment of its current stage. The company has a high-profile robot, ambitious production targets and substantial investor interest, but it has yet to prove that humanoid robotics can become a profitable mass-manufacturing business.

For now, that proof appears likely to take several more years.