Microsoft Adjusts OpenAI Deal Amidst New Joint Venture
In a significant development, Microsoft has revised the terms of its agreement with OpenAI, the creator of ChatGPT, following the announcement of a joint venture between OpenAI, Oracle, and Japan’s SoftBank Group. This new partnership aims to build up to $500 billion worth of AI data centers in the United States.
A New Era in AI Infrastructure
The joint venture, dubbed “Stargate,” was unveiled at the White House on Tuesday, with President Donald Trump in attendance. The initiative is designed to help the United States maintain its lead in the global AI race, leveraging chips from Nvidia.
Microsoft’s Ongoing Partnership with OpenAI
Since 2019, Microsoft has held exclusive rights to build new computing infrastructure for OpenAI. However, in a recent blog post, Microsoft announced that it has “approved OpenAI’s ability to build additional capacity, primarily for research and training of models.” This move has paved the way for OpenAI to collaborate with Oracle.
The Structure of Stargate
According to a person familiar with the deal, Stargate is a joint venture structured as a new entity, with OpenAI holding an equity stake, governance rights, and operational control. The venture will have a separate board appointed by its founding members and its own CEO. Other investors, including United Arab Emirates firm MGX, will also be involved.
Microsoft’s Role in Stargate
While Microsoft will not be an equity funder in the new venture, it will serve as a “technology partner” alongside Nvidia and Arm. SoftBank CEO Masayoshi Son will chair the entity’s board.
Exclusive Rights to OpenAI’s API
Microsoft has retained the exclusive right to offer OpenAI’s API, ensuring that Oracle will not be able to host OpenAI’s primary source of revenue. Microsoft has emphasized that its partnership with OpenAI remains intact, with “revenue sharing agreements that flow both ways” and exclusivity on OpenAI’s APIs continuing through 2030.
Commitment to Azure Cloud Computing
Microsoft has also highlighted OpenAI’s recent large Azure commitment, which will support all OpenAI products and training. This development underscores the ongoing collaboration between Microsoft and OpenAI in the realm of cloud computing.
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