Microsoft Ends Exclusive Partnership with OpenAI

Microsoft was formerly the sole provider of data center infrastructure for OpenAI’s artificial intelligence models. This is now changing.

In line with the announcement of Stargate, a significant new deal involving OpenAI and various partners, including Oracle and SoftBank, Microsoft has revealed a new agreement with OpenAI. Under this arrangement, Microsoft has secured the "right of first refusal" for any new cloud computing capacity that OpenAI may offer. This means that in the future, Microsoft will have the first opportunity to host OpenAI’s AI workloads in its cloud computing services. However, should Microsoft be unable to fulfill OpenAI’s requirements, OpenAI then is free to seek services from other cloud providers.

Microsoft noted in a recent blog post that OpenAI has made a substantial commitment to Azure, which will ensure the ongoing support of OpenAI’s products, including those related to training AI models. Additionally, Microsoft has granted OpenAI the authorization to expand its capacity, primarily for research and model training.

Challenges related to computing resources have reportedly led to delays in product launches by OpenAI. This issue has been a point of contention between OpenAI and Microsoft, despite their close collaboration and alliance.

In their blog post, Microsoft emphasized that important aspects of their long-term partnership with OpenAI would continue through 2030. These include access to OpenAI’s intellectual property, arrangements for revenue sharing, and exclusive rights to OpenAI’s APIs.

Interestingly, an agreement between the two companies specifies that if OpenAI achieves artificial general intelligence (AGI) that generates at least $100 billion in profits, Microsoft will lose access to OpenAI’s technology. This adds a layer of complexity to their relationship, as OpenAI may be considering dissolving this agreement to negotiate further investment from Microsoft.

Also, Microsoft reiterated that the OpenAI API remains exclusive to Azure and operates through Azure OpenAI Service. This collaboration aims to provide customers with access to top-tier AI models on Microsoft’s platforms, directly from OpenAI.

We have reached out for further details from both OpenAI and Microsoft.

Microsoft, OpenAI, Cloud