On Monday, Microsoft and OpenAI announced that they have, once again, renegotiated the deal binding the two companies. Despite some opinions on X that frame it as a victory for the ChatGPT maker over the Windows giant, both sides are walking away winners.
Most importantly, the new terms solve an issue that was hanging over OpenAI’s head since it signed its up-to-$50-billion deal with Amazon.
With this new deal, instead of Microsoft having exclusive access to all of OpenAI’s products and IP until the magical day when OpenAI produces AGI, its partnership has a definitive timeline. This contract gives Microsoft a nonexclusive license to OpenAI IP for models and products through 2032.
The two companies are still calling Microsoft OpenAI’s “primary cloud partner,” meaning that the bulk of OpenAI’s cloud will likely be served by Azure for the six years this deal covers, even as OpenAI rushes to build its own data centers with other partners. In October, OpenAI agreed to buy an additional $250 billion worth of Microsoft’s cloud. This line is a message to Microsoft shareholders that OpenAI will still be an enormous Azure customer.
OpenAI products will ship “first on Azure, unless Microsoft cannot and chooses not to support the necessary capabilities,” the companies say. But, critically, “OpenAI can now serve all its products to customers across any cloud provider.”
Again, “first” is not defined clearly in this announcement, whether that means exclusive on Azure only for some time period or just that Microsoft will also be among the vendors carrying OpenAI’s latest products.
But the most important part of this term: It solves the possibility that Microsoft could sue OpenAI over the AI lab’s deal with Amazon.
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To recap that messiness: In February, OpenAI announced that Amazon was investing up to $50 billion in the model maker, comprised of a $15 billion initial investment and another $35 billion “in the coming months when certain conditions are met,” the companies said, without specifying what those conditions were.
In exchange, OpenAI agreed to co-deve …