Software King of the World Microsoft and OpenAI have loosened the screws on their once-tight partnership, a not-so-subtle sign they are drifting apart during the AI gold rush.
Under revised measures, OpenAI can flog its tech more widely, while Vole has dropped its exclusive right to host the start-up’s models.
In return, Microsoft keeps a slice of the start-up’s revenue and gets the “AGI clause” binned, the bit that could have left it locked out of OpenAI’s best kit.
The tweaks keep peeling away from the original alliance, lifting some revenue-sharing obligations for Vole while letting OpenAI shop around among other cloud providers with fewer strings attached.
That new flexibility fits OpenAI’s need to crank revenues, defend its $852bn valuation and tee up a blockbuster initial public offering. Under the revised deal, Vole keeps its $135bn stake and remains the largest shareholder.
OpenAI will continue paying Vole a revenue share on products and services until 2030, but that share is now capped.
A person familiar with the matter said Microsoft will continue to receive 20 per cent of what OpenAI earns from product sales, including income generated on rival cloud platforms such as Amazon Web Services and Google Cloud.
Neither company explained the cap, though one person familiar with the thinking said it was likely to be agreed annually.
Vole no longer has to pay OpenAI a 20 per cent share of the revenue it makes from selling access to ChatGPT on its own servers. After 2032, the software giant will keep a non-exclusive licence to OpenAI’s models.
The “AGI clause” has been scrapped, ending a long-running argument about what happens if OpenAI hits the so-called finish line. That clause would have cut Microsoft off if OpenAI built artificial general intelligence, defined as a “highly autonomous system that outperforms humans at most economically valuable work”.
A source in the Vole hill said: “We gave up exclusivity in return for certainty. We have royalty-free access to a frontier model and get a revenue share guaranteed on top, without the fear of them triggering the AGI clause.”
OpenAI said it had “established a wind-down process to no longer transfer frontier research IP other than what is necessary for Microsoft to commercialise”.
Microsoft said: “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.”
Since investing an initial $1bn in OpenAI in 2019, Microsoft has been OpenAI’s exclusive cloud provider and has promoted its products through Azure to enterprise customers.
Now OpenAI can deliver products through any cloud provider, but launches must hit Azure first. That detail is likely to clear the runway for OpenAI’s $50bn arrangement with Amazon and for its agentic product, Frontier, to be offered through AWS.
OpenAI said: “This keeps the partnership, but removes the bottlenecks. Microsoft remains deeply aligned as a major shareholder and infrastructure partner, while OpenAI now has the independence to build and scale globally on our own terms.”
