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OpenAI and Microsoft Redraw Exclusivity Deal

Elizabeth Greenberg

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microsoft openai
The new deal will see the partnership simplified, with better defined boundaries and less exclusivity. 

OpenAI is changing its relationship with Microsoft, reworking its exclusive, multi-billion dollar partnership to allow the AI firm to form cloud partnerships with some of Microsoft’s rivals.

The announcement of the rework comes shortly after Amazon locked in a cloud deal with OpenAI, and would mean OpenAI could work with other cloud companies like Google.

Microsoft’s partnership with OpenAI began about seven years ago, and the tech giant eventually gaining a 27% stake of OpenAI’s for-profit after investing billions of dollars.

The new agreement will see Microsoft remain the primary cloud partner of OpenAI, and will see its products ship first on Azure “unless Microsoft cannot and chooses not to support the necessary capabilities.”

While Microsoft will remain a first choice, OpenAi will not have the ability to freely choose to serve its products “across any cloud provider.”

Microsoft no longer needs to pay a revenue share to OpenAI for using its models under the new agreement, but OpenAI will continue to pay a revenue share to Microsoft until 2030 at a 20% rate.

While Microsoft will retain a license to OpenAI’s models through 2032, this is no longer an exclusive license.


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The new agreement notebly removes any scrutiny surrounding OpenAI’s progress towards Artificial General Intelligence (AGI), which was previously the benchmark that would remove disable Microsoft’s exclusive rights on OpenAI’s models.  Now, a total cap has been created on Microsoft’s revenue share payments from OpenAI which will continue until 2030.

While the announcement still sees Microsoft come out as a ‘first’ cloud provider to OpenAI and sees the tech titan retain revenue shares of the growing AI firm, Microsoft saw its stock down by one 1% on Monday.

Elizabeth Greenberg

Staff Writer

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