Microsoft ends revenue-share payments to OpenAI under amended partnership terms

Microsoft and OpenAI said on April 27 they rewrote key terms of their alliance, ending Microsoft’s obligation to pay OpenAI a share of revenue from AI products it resells and dropping the exclusivity that had tied OpenAI’s commercial distribution closely to Azure. The companies disclosed the changes in parallel statements that recast a partnership that has shaped the enterprise AI market since Microsoft’s first investment in OpenAI in 2019. The revised terms keep Microsoft as OpenAI’s primary cloud partner while allowing OpenAI to serve customers across other cloud providers. Microsoft’s license to OpenAI intellectual property now runs through 2032 on a non-exclusive basis, the companies said. ### When did the terms actually change? April 27 is the date both companies publicly announced the amendment. Microsoft said in a company blog post that it would “no longer pay a revenue share to OpenAI,” while OpenAI said the change was part of an agreement meant to provide “flexibility” and “certainty” in the relationship. Bloomberg reported that Microsoft gave up its exclusive right to sell OpenAI’s models as part of the revised arrangement. (blogs.microsoft.com) In exchange, Bloomberg said, Microsoft no longer pays revenue share on OpenAI products it resells through its cloud. ### What exactly ended — and what stayed in place? Microsoft said the amendment removed one of the most commercially important features of the old setup: exclusivity. (blogs.microsoft.com) OpenAI said it can now serve “all its products” to customers across any cloud provider, although Microsoft remains its primary cloud partner and OpenAI products will ship first on Azure unless Microsoft cannot or chooses not to support the needed capabilities. (bloomberg.com) The 2032 date remained central to the revised structure. OpenAI said Microsoft will continue to have a license to its intellectual property for models and products through 2032, but that license is now non-exclusive. ### Who still pays whom under the new arrangement? Microsoft said one revenue stream ended and another stayed. The company said it will no longer pay revenue share to OpenAI, but revenue-share payments from OpenAI to Microsoft continue through 2030 at the same percentage, subject to a total cap. (openai.com) CNBC reported that Microsoft has invested more than $13 billion in OpenAI since 2019 and said the amended agreement preserved OpenAI’s payments to Microsoft even as it loosened Azure exclusivity. (openai.com) GeekWire separately reported that those payments continue through 2030 under a new cap. ### What did Sam Altman say after the change? Sam Altman said on May 21 that Microsoft remains OpenAI’s primary cloud partner. (blogs.microsoft.com) That statement aligned with the language OpenAI had already published on April 27, which said OpenAI products would launch first on Azure unless Microsoft declines or lacks the required capacity. OpenAI’s April 27 statement also made clear that the new terms let it sell across other clouds. That means Microsoft kept priority status without keeping exclusivity. (cnbc.com) ### Where does this leave customers and cloud rivals? OpenAI said customers can now access its products across any cloud provider. Bloomberg reported that the change opens the door for OpenAI to pursue arrangements with cloud rivals including Amazon. CNBC said the new terms also allow distribution across providers including Amazon and Google. (openai.com) The next dated milestones in the revised deal are 2030 and 2032. (openai.com) OpenAI’s revenue-share payments to Microsoft continue through 2030, Microsoft said, and Microsoft’s non-exclusive license to OpenAI models and products runs through 2032, according to both companies’ April 27 statements. (blogs.microsoft.com) (bloomberg.com)