Microsoft, OpenAI Rewrite Rules of Their AI Alliance
OpenAI gains room to sell across rival clouds, while Microsoft keeps long-term access to its models and a capped revenue stream through 2030.
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Microsoft Corp. and OpenAI revised their partnership agreement on Monday, ending Microsoft’s revenue-share payments to OpenAI, stripping cloud exclusivity and converting Microsoft’s intellectual property license to a non-exclusive arrangement.
In a joint announcement, the companies said the revised agreement is intended to provide “flexibility, certainty, and a focus on delivering the benefits of AI broadly.”
Under the amended terms, Microsoft retains a license to OpenAI’s models through 2032, but OpenAI is now free to sell its products across any cloud provider, including Amazon Web Services and Google Cloud.
Azure retains preferred status as OpenAI products launch there first unless Microsoft cannot or chooses not to support the required capabilities.
The financial restructuring runs asymmetrically as Microsoft stops paying revenue share to OpenAI immediately.
But OpenAI continues making payments to Microsoft through 2030 at the existing percentage, subject to a new total cap. Those payments are also no longer contingent on OpenAI’s progress toward artificial general intelligence, a clause that had clouded OpenAI’s $50 billion cloud agreement with Amazon signed in February.
Microsoft has invested more than $13 billion in OpenAI since 2019 and holds roughly a 27% diluted stake. It remains a major shareholder.
“The greater predictability in the amended agreement strengthens our joint ability to build and operate AI platforms at scale while providing both companies the flexibility to pursue new opportunities,” the companies said in the statement.
The revised deal comes as both companies continue to invest heavily in AI infrastructure, including datacenter capacity, custom silicon and cybersecurity applications.
“While this amendment simplifies the partnership, the work we’re doing together remains ambitious,” the release said. “From scaling gigawatts of new datacenter capacity, to collaborating on next-generation silicon, to applying AI to advance cybersecurity.”
