Synopsis
Microsoft's exclusive hold on OpenAI's artificial intelligence models is over. This change allows OpenAI to offer its technology to competitors like Amazon and Google. Microsoft will still be OpenAI's main cloud partner and has licensing rights until 2032. This development impacts the ongoing artificial intelligence race.Following the joint announcement, Microsoft shares slipped about 1% in premarket trading on Monday as some investors saw the shift as the company losing a valuable competitive advantage.
Microsoft has in recent years emerged as a major player in the AI race, benefiting from its early bet on OpenAI that allowed it to quickly launch AI technology across its products.
But tensions have been rising between the companies over the tie-up as OpenAI strikes cloud deals with rival companies and investors scrutinize Microsoft's alliance on OpenAI.
The Financial Times reported in March Microsoft was weighing legal action against Amazon and OpenAI over a $50 billion cloud deal that could breach its exclusive cloud partnership.
Under the reworked partnership, Microsoft will remain OpenAI's primary cloud partner and with will hold a license to ChatGPT creator's intellectual property through 2032. Microsoft will also not pay a revenue share to OpenAI.
OpenAI products would also first ship on Microsoft's Azure cloud-computing platform unless the software giant cannot or chooses not to roll out the capabilities.
