Microsoft has clarified its partnership with OpenAI after the latter announced a $500 billion data center initiative.
Since investing more than $10bn in the company from 2019, Microsoft has been the company's exclusive cloud provider. But, with OpenAI's compute demands growing, that relationship has grown strained as the world's second-largest cloud provider struggled to keep up.
Last year, OpenAI announced that it would also work with Oracle, albeit in partnership with Microsoft.
Now, the company plans to set up 'The Stargate Project,' a standalone company that will invest $500 billion into AI infrastructure over the next four years to fuel its AI workloads.
While Microsoft is noted as a 'key initial technology partner' in Stargate, it is not an equity funder like rival Oracle (as well as SoftBank, OpenAI, and Abu Dhabi's MGX).
"The key elements of our partnership remain in place for the duration of our contract through 2030, with our access to OpenAI’s IP, our revenue sharing arrangements, and our exclusivity on OpenAI’s APIs all continuing forward," Microsoft said in a statement.
The company noted that, alongside Stargate, OpenAI "made a new, large Azure commitment that will continue to support all OpenAI products as well as training."
However, it admitted that the partnership was no longer exclusive, with the firms "moving to a model where Microsoft has a right of first refusal (ROFR). To further support OpenAI, Microsoft has approved OpenAI’s ability to build additional capacity, primarily for research and training of models."
It said that Microsoft continues to have rights to OpenAI IP (inclusive of model and infrastructure) for use within its products like Copilot.
Critically, it added: "The OpenAI API is exclusive to Azure, runs on Azure, and is also available through the Azure OpenAI Service. This agreement means customers benefit from having access to leading models on Microsoft platforms and direct from OpenAI."
The two companies will continue to have "revenue sharing agreements that flow both ways." Microsoft received a quarter of OpenAI’s revenue prior to Stargate, and it's not clear if that number will change.
Back in November 2023, when Microsoft was the only compute provider for OpenAI, Microsoft's CEO Satya Nadella said: “If OpenAI disappeared tomorrow... we have all the IP rights and all the capability. We have the people, we have the compute, we have the data, we have everything.
"We are below them, above them, around them."