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OpenAI and Microsoft on Monday announced a revamped partnership agreement that will allow the artificial intelligence company to cap revenue share payments and serve customers across any cloud provider.
As part of the new agreement, the companies said revenue share payments from OpenAI to Microsoft will be "subject to a total cap," but they will continue through 2030, "independent of OpenAI's technology progress." Microsoft no longer needs to determine its response if OpenAI finds that it has reached artificial general intelligence, or AGI, which is a term for an AI system that rivals or exceeds human intelligence.
The revenue share between the two companies has existed for years. OpenAI will pay Microsoft at the same percentage, which is 20%, as part of the new deal, according to a source familiar with agreement who asked not to be named because the details are confidential. That means, for example, Microsoft continues to get a cut of every ChatGPT subscription purchase.
To date, when users have paid for access to OpenAI models through Azure, Microsoft has made payments to OpenAI. However, Microsoft will no longer pay a revenue share to OpenAI, according to Monday's blog post.
The two companies said that Microsoft remains OpenAI's primary cloud provider, and that OpenAI products will ship first on Azure unless Microsoft decides otherwise. However, OpenAI can now serve "all of its products" to customers across any provider, including Amazon and Google.
Microsoft has been one of OpenAI's longtime backers, investing more than $13 billion in the company since 2019. The companies have continued to tout their relationship as core and strategic, but it's shown signs of strain in recent months as the partners move onto the other's turf. In a memo earlier this month, Denise Dresser, OpenAI's revenue chief, said the partnership has "limited our ability to meet enterprises where they are."
"Today, we are announcing an amended agreement to simplify our partnership and the way we work together, grounded in flexibility, certainty, and a focus on delivering the benefits of AI broadly," OpenAI said.
Microsoft will continue to have a license to OpenAI's intellectual property on AI models through 2032, although the license will no longer be exclusive, the two companies said.
Microsoft shares fell slightly on Monday.
The revamped partnership comes after Microsoft and OpenAI announced a series of changes to their agreement in October, when OpenAI completed a recapitalization and committed to spending $250 billion on Microsoft Azure cloud services. As part of that announcement, Microsoft said its investment in OpenAI's for-profit arm was valued at $135 billion, or roughly 27% of the company on an as-converted diluted basis.
But in the months since, OpenAI has been looking to diversify its reach, striking multibillion-dollar deals with Microsoft competitors like Amazon. Model developers are seeing customers run AI agents that carry out tasks over several hours. In recent weeks Meta committed to spending $48 billion with cloud providers CoreWeave and Nebius to supplement its own computing power.
Amazon and OpenAI formed a major strategic partnership in February, with Amazon agreeing to invest up to $50 billion in the company. OpenAI said it would expand its existing $38 billion agreement with Amazon Web Services by $100 billion over the next eight years. AWS will also serve as the exclusive third-party cloud distribution provider for OpenAI's enterprise platform Frontier, which it unveiled earlier this month.
Following that announcement, Microsoft and OpenAI released a joint statement that said their partnership remained "strong and central."
Amazon CEO Andy Jassy wrote in a post on X on Monday that AWS will go further, providing OpenAI models to clients through the Bedrock service in the next few weeks.
"With this, builders will have even more choice to pick the right model for the right job," Jassy wrote, adding that the company will offer more details at an event in San Francisco on Tuesday.
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