Microsoft and OpenAI renegotiates their partnership, ending exclusive AI pact

Microsoft and OpenAI have reconsidered their partnership, ending the exclusivity that previously allowed Microsoft to be the sole seller of OpenAI’s AI models. This opens a new avenue for OpenAI to strike deals with rival cloud providers, including Amazon.

The shift marks a significant evolution in one of the most influential alliances of the AI era and is seen as strategically beneficial for both companies. Following the announcement, Microsoft’s shares briefly dipped 1.3% before closing largely unchanged, while Alphabet rose 1.81% and Amazon declined 1.1%.

Microsoft’s $13 billion investment in OpenAI since 2019 played a key role in the startup’s rise and also fueled growth in its Azure cloud business. However, tensions had been building as OpenAI sought greater flexibility to partner with other cloud providers.

Under the new terms, Microsoft will remain OpenAI’s primary cloud partner and retain access to its intellectual property through 2032. It will also receive a guaranteed 20% share of OpenAI’s revenue until 2030, subject to an undisclosed cap. In return, OpenAI gains the freedom to expand its enterprise business and secure additional computing capacity, strengthening its position against rivals like Anthropic ahead of potential IPOs.

The revised deal also removes a clause that would have allowed OpenAI to stop payments upon achieving artificial general intelligence (AGI). At the same time, Microsoft will no longer receive a share of its own revenue generated from offering OpenAI models on Azure.

OpenAI's promise to use at least $250 billion in Azure services by 2032 remains in place, with Microsoft having the right to make OpenAI products available first on ‌Azure, unless Microsoft ⁠decides not to support them. Microsoft will also no longer pay OpenAI a share of Microsoft's revenue for offering OpenAI models on Azure.