OpenAI has ended its exclusivity to Microsoft. This means that Microsoft will no longer have exclusive access to OpenAI’s artificial intelligence models and products. The start will also allow access to its rival cloud platforms such as Google and Amazon. OpenAI and Microsoft announced the revised deal in a statement on Monday, April 27.
Since the exclusivity is ending, Microsoft will no longer pay a revenue share on OpenAI products it resells on its cloud.
“The greater predictability in the amended agreement strengthens our joint ability to build and operate AI platforms at scale while providing both companies the flexibility to pursue new opportunities,” OpenAI and Microsoft said in their statement.
The new pact has been foundational to OpenAi’s rise and artificial intelligence boom. OpenAI has since pursued deals with multiple cloud providers, including Amazon, to meet its growing computing needs to build and serve AI software to a wider audience.
Microsoft shares dropped about 1 per cent in premarket trading after a joint statement was made as the tech giant lost a competitive advantage.
This could turn out to be a huge disadvantage for Microsoft since it is one of the giants that emerged as a major player in the AI race. It benefitted from its early bet on OpenAI. But tensions have been rising between the companies over the tie-up as OpenAI strikes cloud deals with rival companies and investors scrutinize Microsoft’s alliance on OpenAI.
The Financial Times reported in March Microsoft was weighing legal action against Amazon and OpenAI over a $50 billion cloud deal that could breach its exclusive cloud partnership.
Under the reworked partnership, Microsoft will remain OpenAI’s primary cloud partner and with will hold a license to ChatGPT creator’s intellectual property through 2032. Microsoft will also not pay a revenue share to OpenAI.
OpenAI products would also first ship on Microsoft’s Azure cloud-computing platform unless the software giant cannot or chooses not to roll out the capabilities.
(With Reuters inputs)
