On Monday, OpenAI and Microsoft announced a revised partnership agreement. This new arrangement includes a cap on revenue share payments and enables OpenAI to serve customers across any cloud provider.
The revenue share payments from OpenAI to Microsoft will continue through 2030, but they will be subject to a total cap. Microsoft will no longer pay a revenue share to OpenAI, as noted in a blog post.
The revenue sharing agreement has been in place for years. Under the new deal, OpenAI will maintain a 20% payment to Microsoft, according to a confidential source.
OpenAI confirmed that Microsoft remains its primary cloud provider. Its products will be delivered first on Azure unless Microsoft chooses otherwise.
OpenAI is now permitted to offer all its products to customers through other providers, including Amazon and Google. Microsoft has invested over $13 billion in OpenAI since 2019.
The partnership has been described as core and strategic, though signs of strain have emerged as both companies venture into each other’s markets. Denise Dresser, OpenAI’s revenue chief, mentioned that the partnership has limited their ability to meet enterprise needs.
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 announcement follows changes made to their agreement in October during OpenAI’s recapitalization.
In that October announcement, Microsoft revealed its investment for-profit arm was valued at $135 billion, representing about 27% of the company on a diluted basis. Recently, OpenAI has sought to diversify its partnerships, including major deals with Microsoft competitors.
In February, OpenAI formed a strategic partnership with Amazon, which agreed to invest up to $50 billion. This partnership aims to expand OpenAI’s existing agreement with Amazon Web Services by $100 billion over the next eight years.
As part of the deal, AWS will serve as the exclusive cloud provider for OpenAI.
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