Microsoft and OpenAI have updated their partnership agreement, removing exclusivity rights that previously allowed the former to be the sole distributor of the AI models developed by the ChatGPT developer.
This adjustment enables OpenAI to seek agreements with other cloud and enterprise providers, including Amazon.
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Under the new terms, Microsoft remains OpenAI’s principal cloud partner. Microsoft will continue to deploy OpenAI’s products on its Azure service before any other provider, unless technical constraints prevent this.
However, OpenAI is now free to offer its AI products to clients using any cloud service.
Microsoft holds a non-exclusive licence to OpenAI’s intellectual property through 2032, replacing its past exclusive access.
The financial dynamics of the partnership have also changed.
Microsoft will not make further revenue share payments to OpenAI. As per the revised terms, the ChatGPT maker will continue to pay Microsoft a designated share of revenue, at the existing percentage, until 2030, subject to a defined cap.
The amendment also eliminates a clause from the earlier agreement that would have allowed OpenAI to end payments to Microsoft in the event it reached artificial general intelligence.
In practical terms, these developments provide OpenAI with alternatives for accessing greater computing resources and pursuing enterprise partnerships. This could help the company to compete with other AI developers in the run-up to potential public offerings.
Microsoft, meanwhile, retains its position as a major shareholder in OpenAI and secures continued, although capped, revenue from the company’s growth.
Previously, Microsoft’s exclusive arrangement limited the ability of other cloud providers, including Amazon, to offer OpenAI’s models directly.
The renegotiated agreement opens the way for broader industry partnerships while maintaining core aspects of the collaboration between the two firms.
In late March, OpenAI completed a financing round, raising $122bn in committed funding and reaching a post-money valuation of $852bn.
The round surpassed its initial $110bn target and was co-led by SoftBank, with participation from Amazon, Nvidia, Microsoft, Andreessen Horowitz, D. E. Shaw Ventures, MGX, TPG, and accounts advised by T. Rowe Price Associates.
For the first time, OpenAI also included individual investors through banking partners, obtaining approximately $3bn from this group.
