In short
- Microsoft valued its stake in OpenAI at $135 billion and extended exclusive rights to frontier models until 2032.
- OpenAI can now collaborate with third-party developers and release open-weight models, while Microsoft can pursue AGI independently.
- The update comes as Microsoft faces an antitrust lawsuit alleging it used Azure’s dominance to inflate ChatGPT prices.
On Tuesday, Microsoft and OpenAI announced a restructured partnership that values the Redmond giant’s stake at $135 billion, about 27% of OpenAI’s new public business, even as both companies face antitrust investigations and a federal lawsuit over computer monopolization.
The reworked pact supports OpenAI’s conversion to OpenAI Group PBC under the nonprofit OpenAI Foundation, and positions Microsoft as the company’s “frontier model partner” through 2032, according to a release issued Tuesday. statement.
Board Chairman Bret Taylor and CEO Sam Altman can now control appointment and removal powers over the PBC board, consolidating Altman’s authority.
OpenAI will continue to funnel roughly 20% of revenue to Microsoft, although both parties expect this flow to end once an independent panel determines that artificial general intelligence has been achieved.
Microsoft will retain exclusive IP licenses to OpenAI’s models and products, including post-AGI systems, until 2032, but will have no rights to any consumer hardware that OpenAI produces, the statement said.
The AI giant can collaborate with third-party developers on joint products, deploy open-weight models that meet security thresholds, serve US national security agencies on any cloud infrastructure, and independently pursue its own AGI research capabilities, which were previously blocked by Microsoft’s exclusivity provisions.
API products co-developed with third parties are exclusive to Azure, while non-API products can be offered by any cloud provider.
Microsoft and OpenAI did not immediately respond Declutter request for comment.
The announcement comes amid mounting legal pressure, as a class action lawsuit filed two weeks earlier claims Microsoft weaponized its 2019 Azure exclusivity agreement to computational acceleration capacity for ChatGPT, artificially maintaining subscription rates at “100 to 200 times” competitors’ levels during the AI pricing dispute in February.
“The AI we build today will define our future. The path we are currently on, dominated by centralized AI, is fraught with danger,” said Jiahao Sun, CEO of FLock.io. Declutter. “If a few powerful entities control AI, we risk creating systems that reflect a narrow worldview, perpetuate biases and undermine trust.
OpenAI has also committed to purchasing $250 billion worth of additional Azure services, although Microsoft has given up its rights as a computing provider.
The requirement that OpenAI source all computing resources exclusively from Microsoft had become a major sticking point as ChatGPT’s 800 million weekly users and research needs drove up infrastructure costs.
The collaboration started in July 2019 with a Investment of 1 billion dollars which made Microsoft OpenAI the exclusive cloud provider and deepened in January 2023 a billion-dollar expansion that positioned Microsoft as the main backer of OpenAI.
The latest announcement also comes as OpenAI announced regarding mental health signals among its user base: approximately 1.2 million weekly users, or about 0.15% of actives, showed explicit indicators of suicidal planning or intention.
Generally intelligent Newsletter
A weekly AI journey narrated by Gen, a generative AI model.
