Microsoft and OpenAI Rework AI Deal, Cutting Exclusivity and AGI Provisions

In brief

• Microsoft and OpenAI amended their partnership to reduce mutual dependence.
• Microsoft will no longer be the exclusive licensee of OpenAI's tech, and revenue-sharing arrangements between the companies will end.
• The changes take effect immediately while Microsoft retains its stake valued at over $135 billion.

Microsoft will continue licensing OpenAI's technology through 2032, but is ending its exclusive partnership with the AI company, according to announcements from both firms Monday.

Under the restructured agreement, OpenAI can serve all its products to customers across any cloud provider, ending Microsoft's previous status as exclusive cloud partner. Revenue share payments from OpenAI to Microsoft will continue through 2030, though other revenue-sharing arrangements are eliminated.

The new agreement removes complex language that could have changed the partnership if OpenAI declared it had reached artificial general intelligence, or AGI. Microsoft's stake in OpenAI is valued at more than $135 billion, according to the New York Times.

Microsoft retains its license to OpenAI intellectual property for models and products through 2032, preserving the tech giant's access to the underlying technology while OpenAI gains operational independence.

The partnership restructuring follows Microsoft's earlier moves to diversify its AI relationships. In September, Microsoft said it would reduce reliance on OpenAI by purchasing models from rival Anthropic. Just recently, Microsoft launched an AI-powered tool called Copilot Researcher, which combines OpenAI’s GPT and Anthropic’s Claude with impressive results.

When OpenAI raised $110 billion in fresh funding from Amazon, SoftBank, and Nvidia in February, the startup and Microsoft issued a joint statement saying that they continue to be close allies despite the AI giant’s growing list of supporters.

“Microsoft and OpenAI continue to work closely across research, engineering, and product development, building on years of deep collaboration and shared success,” they said in February. “Microsoft maintains its exclusive license and access to intellectual property across OpenAI models and products. Collaborations like the partnership between OpenAI and Amazon were always contemplated under our agreements and Microsoft is excited to see what they build together.”