dailyloe.com – OpenAI and Microsoft announced a new partnership agreement on Monday, allowing OpenAI to cap revenue share payments and serve customers across any cloud provider.
The new agreement stipulates that revenue share payments from OpenAI to Microsoft will be “subject to a total cap,” continuing through 2030, regardless of OpenAI’s technology advancements.
Microsoft will no longer need to respond if OpenAI achieves artificial general intelligence (AGI), which refers to AI systems that match or surpass human intelligence.
The revenue sharing agreement has been in place for years, with OpenAI paying Microsoft a consistent 20% share under the new deal, according to a confidential source.
Additionally, Microsoft will cease paying revenue shares to OpenAI, as stated in a blog post.
OpenAI confirmed that Microsoft remains its primary cloud provider, with products launching first on Azure unless Microsoft chooses otherwise.
However, OpenAI can now offer all its products to customers using various providers, including competitors like Amazon and Google.
Since 2019, Microsoft has invested over $13 billion in OpenAI, maintaining a core and strategic relationship, although it has shown signs of strain recently.
Denise Dresser, OpenAI’s revenue chief, mentioned that the partnership had “limited our ability to meet enterprises where they are” in a memo earlier this month.
OpenAI stated, “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.”
This revamped partnership follows changes announced in October when OpenAI completed a recapitalization.
At that time, Microsoft valued its investment for-profit arm at $135 billion, representing about 27% of the company on an as-converted diluted basis.
Since then, OpenAI has sought to diversify its partnerships, including significant deals with Microsoft competitors like Amazon.
In February, Amazon and OpenAI formed a major strategic partnership, with Amazon agreeing to invest up to $50 billion in OpenAI.
