Microsoft and OpenAI, once models of "close partners" in the AI era, have finally come to a time when they let go of each other and are allowed to be free. On Monday evening, Beijing time, Microsoft and OpenAI simultaneously issued a statement announcing that "the cooperation has entered the next stage."
(Source: Company official website)
The statement stated,Microsoft’s intellectual property license to OpenAI models and products will become non-exclusive, the validity period will remain unchanged until 2032.
Microsoft will no longer pay revenue share to OpenAI. OpenAI will continue to pay revenue share to Microsoft until 2030, with the share ratio remaining unchanged but with an undisclosed total cap.It is also not affected by technological progress.
At the same time, Microsoft remains OpenAI's main cloud partner. OpenAI's new products will be released first on the Microsoft Azure cloud (unless Microsoft cannot support or chooses not to support necessary features).OpenAI can now offer all of its products to customers through any cloud service provider.
The parties said in a statement that the revised agreement "aims to simplify the relationship and collaboration between the two parties." The revised agreement improves the predictability of cooperation, thereby enhancing the ability of both parties to build and operate AI platforms on a large scale, and also providesBoth companies retain the necessary flexibility to explore new development opportunities.
Affected by this news, Microsoft fell nearly 1% at the opening on Monday, after falling nearly 4% in the pre-market period. Amazon also fell nearly 1% after the market opened on Monday. Both Microsoft and Amazon will release earnings reports after the market close on Wednesday local time.
Relations between the two parties have already been tense
As background, Microsoft's investment in OpenAI first began in 2019, and in January 2023, it spent US$10 billion to acquire nearly one-third of the equity of the ChatGPT developer (the transaction valuation at the time was approximately US$29 billion).
When OpenAI was reorganized last October, it was confirmed that Microsoft owned "approximately 27%" of the OpenAI for-profit entity. Based on OpenAI’s latest financing valuation of US$850 billion,Microsoft's $13 billion investment has doubled to nearly $228.3 billion.
The rift between the two parties is also buried in this agreement. Microsoft disclosed at the time,OpenAI can now co-develop some products with third parties, but API products co-developed with third parties will be limited to Azure. Non-API products can be provided on any cloud service provider.
The problem is,The “third-party partner” OpenAI hired is Amazon Cloud Technology (AWS), the world’s leader in cloud computing.. At the end of February this year, Amazon announced an investment of US$50 billion in OpenAI, including an initial US$15 billion, and subsequent amounts will be unlocked after certain conditions are met.
OpenAI also announced that AWS will become the exclusive third-party cloud distributor of Frontier, OpenAI’s enterprise-level agent management platform. At the same time, OpenAI will use Amazon’s Trainium self-developed chips and jointly develop customized models with the latter (to bypass Microsoft’s API exclusivity).
There have since been rumors that Microsoft management was worried that OpenAI's cooperation with AWS would violate OpenAI's agreement to exclusively run models on Microsoft's Azure cloud, and had considered taking legal action. At the time, a Microsoft spokesperson told the media meaningfully: "We are confident that OpenAI understands and respects the importance of fulfilling its legal obligations."
At the same time, in an internal memo exposed in mid-April,OpenAI revenue chief Denise Dresser also complained that Microsoft was holding back its development. Dresser wrote,The company's new cloud partnership with AWS has generated "alarming" demand, but the company's partnership with Microsoft "limits our ability to deliver services where our customers are".
After revising the agreement at the end of last year, Microsoft also stepped up its efforts to develop large models on its own. Although the previous agreement allowed Microsoft to use OpenAI intellectual property, it also prohibited it from developing competing artificial intelligence systems.
Microsoft AI CEO Mustafa Suleiman said in early April that the team's goal by 2027 is to "be able to truly reach the state of the art," covering models that can respond to or generate text, images and audio.