Microsoft eyes AI startup acquisitions to reduce dependence on OpenAI

Microsoft is exploring artificial-intelligence startup acquisitions as it prepares for a future less dependent on OpenAI, Reuters reported on May 13, citing five people familiar with the matter. The talks came less than three weeks after Microsoft and OpenAI rewrote key terms of their partnership, ending Microsoft’s exclusive license to OpenAI intellectual property and allowing OpenAI to serve customers across rival clouds. April 27 was the date Microsoft and OpenAI disclosed the amended agreement in matching blog posts. The companies said Azure would remain OpenAI’s primary cloud partner and that OpenAI products would ship first on Azure unless Microsoft could not or chose not to support required capabilities. The combination of those two developments has fueled claims on social media that Microsoft is now treating OpenAI more like a supplier than an exclusive strategic arm. (finance.yahoo.com) The public record supports part of that description: exclusivity was reduced, OpenAI gained wider cloud distribution rights, and Microsoft began looking at outside AI targets. The public record does not support the specific social-media estimate that Microsoft once received 60% of Azure AI revenue tied to OpenAI. (blogs.microsoft.com) Reuters, Microsoft and OpenAI have not publicly confirmed that figure. ### What did Microsoft actually change with OpenAI on April 27? Microsoft said on April 27 that its license to OpenAI models and products through 2032 would become non-exclusive. Microsoft also said it would no longer pay a revenue share to OpenAI. OpenAI said the same day that OpenAI would continue paying Microsoft a revenue share through 2030, subject to a total cap. (finance.yahoo.com) CNBC, citing a person familiar with the confidential terms, reported that the percentage remains 20%, though the companies did not disclose the cap amount in their public statements. Microsoft also said the amended deal removed the old dependency on OpenAI’s technology progress for those payments. (blogs.microsoft.com) CNBC reported that Microsoft no longer needs to determine its response if OpenAI says it has reached artificial general intelligence, or AGI. ### Can OpenAI now sell on AWS and Google Cloud? OpenAI and Microsoft said on April 27 that OpenAI can now serve all of its products to customers across any cloud provider. (cnbc.com) Microsoft’s statement kept Azure in the primary position, but it no longer gave Azure exclusive distribution rights. CNBC reported that the new terms allow OpenAI to serve customers through providers including Amazon and Google. (blogs.microsoft.com) Denise Dresser, OpenAI’s chief revenue officer, wrote in a memo viewed by CNBC that Microsoft’s partnership had “limited our ability to meet enterprises where they are,” adding that “for many that’s Bedrock.” ### Is Microsoft really shopping for other AI companies? (blogs.microsoft.com) Reuters reported on May 13 that Microsoft had weighed buying code-generation startup Cursor this spring but backed away because of internal concerns about regulatory scrutiny. Reuters also reported that Microsoft has been in discussions with Inception, a startup founded in 2024 by a Stanford University team and backed by Microsoft’s M12 venture fund. (cnbc.com) Inception hired a bank to help negotiate a deal and is seeking a price of more than $1 billion, Reuters reported, citing a person familiar with the startup. Reuters said the discussions may not result in a transaction. ### What is verified, and what remains unconfirmed? Microsoft’s official blog confirms four core facts: Azure remains OpenAI’s primary cloud partner; OpenAI can serve products across any cloud; Microsoft’s IP license is non-exclusive through 2032; and OpenAI’s revenue-share payments continue through 2030 under a cap. (finance.yahoo.com) OpenAI’s own post matches that outline. The Reuters report supports the claim that Microsoft is examining AI startup deals as it builds alternatives around OpenAI. The unverified pieces are the social-media claims about a specific historical revenue split on Azure and any precise internal framing that Microsoft now sees OpenAI strictly as a “vendor.” Those characterizations have not been confirmed in official filings or named on-the-record comments from Microsoft executives. (blogs.microsoft.com) ### What comes next in the partnership? 2030 is the next hard date in the amended agreement because OpenAI’s revenue-share payments to Microsoft run until then, subject to the undisclosed cap. 2032 is the other fixed term because Microsoft’s non-exclusive license to OpenAI IP runs through that year. May 13 is the latest public marker on Microsoft’s side because that is when Reuters reported the company was pursuing startup options including talks around Inception. (finance.yahoo.com) Any next step is likely to appear either in a deal announcement involving Microsoft and a target company, or in future Microsoft and OpenAI disclosures about how the revised cloud and licensing terms are being implemented. (blogs.microsoft.com)