Microsoft loses OpenAI exclusivity

Microsoft and OpenAI rewrote their partnership on April 27, ending Microsoft’s exclusive license to OpenAI technology and loosening one of artificial intelligence’s tightest alliances. (blogs.microsoft.com) (cnbc.com) The new agreement keeps Microsoft’s license to OpenAI models and products through 2032, but that license is now non-exclusive. OpenAI can offer its services through other cloud providers instead of only through Microsoft Azure. (blogs.microsoft.com) (finance.yahoo.com) Microsoft said it will no longer pay a revenue share to OpenAI. OpenAI will continue paying Microsoft through 2030 at the same percentage, CNBC reported as 20%, but those payments now face a total cap. (blogs.microsoft.com) (cnbc.com) Azure still holds a privileged place in the deal. OpenAI said Microsoft remains its primary cloud provider, and new OpenAI products will launch first on Azure unless Microsoft cannot or chooses not to support them. (blogs.microsoft.com) (finance.yahoo.com) The rewrite also removes an old trigger tied to artificial general intelligence, or AGI, the industry term for systems that match or exceed human performance across many tasks. Microsoft said it no longer needs to decide how to respond if OpenAI determines it has reached AGI. (cnbc.com) (blogs.microsoft.com) That changes the commercial map for companies buying OpenAI tools. A customer that wanted OpenAI models previously had stronger reasons to stay inside Azure; now Amazon Web Services, Google Cloud, and Oracle can compete to host more of that demand. (finance.yahoo.com) (bloomberg.com) Microsoft and OpenAI have been linked since Microsoft’s first 2019 investment in the startup. Their partnership expanded with multibillion-dollar investments, Azure supercomputing capacity, and Microsoft products like Copilot using OpenAI models. (openai.com) (blogs.microsoft.com) Monday’s change does not sever that relationship. It turns exclusivity into a negotiated commercial arrangement, with Microsoft still a major shareholder and Azure still first in line for many launches. (blogs.microsoft.com) (cnbc.com) The companies framed the reset as a way to add “predictability” while keeping their joint infrastructure plans intact. After years of building the market together, they are now writing terms for competing inside it. (blogs.microsoft.com) (cnbc.com)