In a significant shift, Microsoft is no longer the exclusive cloud provider for OpenAI. This change comes alongside the announcement of Stargate, a major infrastructure deal between OpenAI, SoftBank, Oracle, and others. The new arrangement provides Microsoft with a "right of first refusal" on any new cloud computing capacity required by OpenAI. However, if Microsoft cannot meet OpenAI's demands, the company is free to seek a rival cloud provider.

Previously, Microsoft was the exclusive host for OpenAI’s AI workloads, providing the necessary compute resources for training and running its models. But OpenAI's growing needs for additional cloud capacity led to the decision to explore other cloud providers. According to a blog post from Microsoft, OpenAI made a new large commitment to Azure, continuing to support OpenAI’s products and model training. The agreement also allows OpenAI to expand its infrastructure, focusing on research and model development.

A lack of compute capacity had caused delays for OpenAI, and this issue reportedly created tension between the two companies. In June 2023, Microsoft, under shareholder pressure, allowed OpenAI to sign a deal with Oracle for additional cloud capacity. This move marked the beginning of a new chapter in the companies’ partnership.

Despite the changes, Microsoft’s collaboration with OpenAI remains strong. The companies reaffirmed that several key elements of their partnership, such as access to OpenAI's intellectual property, revenue-sharing arrangements, and exclusivity on OpenAI’s APIs, will continue through 2030. However, if OpenAI develops artificial general intelligence (AGI) under their agreed definition, Microsoft will lose access to the company’s technology.

This new cloud arrangement may impact the broader AI ecosystem as both companies continue to build and scale their technologies. The shift away from exclusive reliance on Microsoft suggests OpenAI is securing more diverse cloud resources to fuel its ambitious AI projects.

The ongoing partnership, however, has been subject to ongoing discussions. Reports suggest that OpenAI might even reconsider the agreement in an effort to secure additional funding from Microsoft.

OpenAI’s AI models will continue to run exclusively on Microsoft’s Azure platform. This new deal will ensure customers have access to leading models directly from both Microsoft and OpenAI, enhancing the overall AI development experience.

SOURCE: TECHCRUNCH | PHOTO: GETTYIMAGES