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Microsoft is letting OpenAI get its own AI compute now

Jan 22, 2025 - theverge.com
Microsoft and OpenAI have revised their partnership, allowing OpenAI to access competitors' computing resources while maintaining Microsoft's right of first refusal on new capacity. The core of their relationship remains unchanged, with Microsoft retaining exclusive rights to OpenAI's technology for products like Copilot, and OpenAI's API staying exclusive to Azure. The partnership, which includes a two-way revenue-sharing model, will continue through 2030. Previously, OpenAI was restricted to using Microsoft's Azure cloud infrastructure exclusively, but the new agreement permits OpenAI to build additional capacity for research and model training. This change follows a joint venture announcement involving Arm, Microsoft, Nvidia, Oracle, and OpenAI to create data centers in the U.S. called Starbase.

The partnership adjustments come amid reports of tension between the companies, exacerbated by financial pressures at OpenAI and concerns about stability. The relationship was further strained when Microsoft hired Inflection CEO Mustafa Suleyman and most of his staff, which reportedly upset some OpenAI leadership. OpenAI's deal with Microsoft includes an escape clause allowing OpenAI to limit Microsoft's access to its most powerful models if it creates artificial general intelligence (AGI), defined as generating over $100 billion in profits. OpenAI is reportedly considering dropping this provision to secure more funding from Microsoft.

Key takeaways:

  • Microsoft and OpenAI have adjusted their partnership to allow OpenAI access to competitors' compute, with Microsoft retaining a right of first refusal on new capacity.
  • The foundation of the Microsoft-OpenAI relationship remains largely unchanged, with Microsoft maintaining exclusive rights to OpenAI's tech for certain products and OpenAI's API staying exclusive to Azure.
  • OpenAI's deal with Microsoft includes an unusual escape clause related to the creation of artificial general intelligence (AGI), which could limit Microsoft's access to future powerful models.
  • There have been tensions between Microsoft and OpenAI, partly due to financial pressures and strategic moves, such as Microsoft's hiring of Inflection's CEO and staff, which reportedly upset some OpenAI leadership.
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