OpenAI and Microsoft are ending their exclusivity agreement, allowing OpenAI to leverage other cloud providers, such as Amazon and Google, to host OpenAI services like ChatGPT. Microsoft and OpenAI's partnership extends back nearly seven years, with Microsoft investing billions of dollars over that time and acquiring a 27% stake in OpenAI's for-profit wing.
In line with the new arrangement, OpenAI and Microsoft are changing up how revenue is divvied up. Microsoft is no longer required to pay a revenue share to OpenAI for using its models, but OpenAI will continue to pay Microsoft a revenue share through 2030, at the current rate of 20%. In addition, Microsoft will maintain a license to OpenAI's models through 2032, but that license is no longer exclusive.
As OpenAI was thrust into the spotlight on the back of ChatGPT, Microsoft has served as somewhat of a surrogate for the company. Microsoft is a publicly traded company, and OpenAI, at this point, is not. Microsoft's multiple rounds of investment and large stake in OpenAI have tied the two companies together, with Microsoft providing the infrastructure and OpenAI bringing the models. The new agreement allows OpenAI to bring an IPO, which is suspected to happen later this year.
OpenAI and Microsoft's relationship has become strained over the past few years, with recent reports suggesting Microsoft considered suing OpenAI in response to a $50 billion investment in the company from Amazon. Last year, around August, when negotiations between the two companies were taking place, reports suggest Microsoft and OpenAI were in disagreement on exclusivity and AGI. The new arrangement is likely the result of those negotiations.
The new partnership terms give OpenAI a greater ability to explore other partnerships, such as the $50 billion planned investment from Amazon. Earlier this year, OpenAI closed a $110 billion funding round that included companies like Amazon, SoftBank, and Nvidia.
In response to the new agreement, Microsoft's stock dipped by around 1% on Monday. The company has seen around an 11% decline in its share value since the beginning of the year.
