OpenAI loosens Microsoft exclusivity

OpenAI and Microsoft rewrote their partnership on April 27, ending Microsoft’s exclusive rights to OpenAI models and opening distribution to other cloud providers. (microsoft.com) (reuters.com) Microsoft said it remains OpenAI’s “primary cloud partner,” and OpenAI products will still ship first on Azure unless Microsoft cannot or chooses not to support the needed capabilities. (microsoft.com) The biggest practical change is that OpenAI can now serve “all its products” to customers on any cloud provider, including Amazon Web Services and Google Cloud. (microsoft.com) (cnbc.com) Microsoft will keep a license to OpenAI intellectual property for models and products through 2032, but that license is now nonexclusive instead of exclusive. (microsoft.com) (cnbc.com) The companies also rewrote the money flows. Microsoft said OpenAI will continue paying revenue share through 2030 at the same percentage, subject to a total cap, while Microsoft will no longer pay revenue share to OpenAI. (microsoft.com) (cnbc.com) CNBC reported that percentage is 20%, according to a person familiar with the agreement, meaning Microsoft still gets a cut of ChatGPT subscription revenue. (cnbc.com) Another clause disappeared with the rewrite: Microsoft no longer has to plan for the old trigger tied to OpenAI declaring it had reached artificial general intelligence, or AGI. Reuters reported the amendment removes the rider that could have let OpenAI stop paying Microsoft at that point. (reuters.com) (cnbc.com) The backdrop is a partnership that started with Microsoft’s first $1 billion investment in 2019 and grew to more than $13 billion as OpenAI became central to Azure and Microsoft’s product lineup. (reuters.com) (cnbc.com) Reuters reported OpenAI still committed to use at least $250 billion in Azure services by 2032, even as it gains room to strike cloud deals with Microsoft’s rivals. (reuters.com) OpenAI’s sales chief Denise Dresser wrote earlier in April that the Microsoft arrangement had “limited our ability to meet enterprises where they are,” according to CNBC. Reuters said demand after OpenAI launched on Amazon’s cloud had been “staggering.” (cnbc.com) (reuters.com) For Microsoft, the rewrite trades exclusivity for a longer, clearer contract. For OpenAI, it turns Azure from a gatekeeper into a preferred first stop. (microsoft.com) (reuters.com)