OpenAI and Microsoft announced changes to their partnership agreement that revise cloud hosting terms, intellectual property licensing, and revenue-sharing arrangements between the two companies since establishing their partnership in 2016.
Under the amended agreement, Microsoft will remain OpenAI’s primary cloud provider, and OpenAI products will continue to launch first on Microsoft Azure unless Microsoft is unable or declines to provide the required infrastructure capabilities. The revised terms also allow OpenAI to offer its products through other cloud providers as OpenAI detailed in a company blog.
Denise Holland Dresser, CRO, OpenAI, stated in a LinkedIn post, “Today was a big milestone as we announced an update to our partnership with Microsoft. Microsoft will remain our primary cloud partner, but our products and services will now be available across all clouds. Excited for what’s to come in this next phase of our partnership to advance and scale AI for people and organizations around the world.”
The companies also changed the structure of Microsoft’s access to OpenAI technology. Microsoft will retain a license to OpenAI intellectual property, including models and products, through 2032, but the license is now non-exclusive rather than exclusive.
The agreement removes Microsoft’s obligation to pay a share of revenue to OpenAI. Concurrently, OpenAI will continue making revenue-sharing payments to Microsoft through 2030 at the existing percentage rate, although those payments will be subject to a capped total amount.
Microsoft will also continue to hold an equity stake in OpenAI and remain one of the company’s largest shareholders. The revised agreement is intended to provide clearer operating terms while preserving flexibility for future business and infrastructure arrangements.
Readers will recall that the partnership between these two companies is flexible and subjected to term alterations. We have reported previously on how OpenAI and Microsoft entered a new phase in their partnership by signing a definitive agreement that formalizes the path for OpenAI to form a Public Benefit Corporation (PBC), and undergo recapitalization, as part of a complex process of building its identity as a for-profit corporation.