Key Points
- Microsoft and OpenAI have a new partnership agreement. The deal allows OpenAI to move forward with its plan to become a for-profit company.
- Microsoft will get a 27% stake in the new entity, valued at $135 billion.
- OpenAI will no longer be exclusive to Microsoft’s cloud, but has committed to a $250 billion purchase from Azure.
- The new agreement also sets out the terms for what happens after AGI is achieved.
Microsoft and OpenAI have struck a new deal that paves the way for the ChatGPT creator to transform into a for-profit company. The revamped partnership gives Microsoft a massive 27% stake in the new entity, valued at around $135 billion, but also gives OpenAI more freedom to work with other companies.
This is a major step in the evolution of what has become the most important partnership in the AI world. Microsoft’s multi-billion-dollar investment in OpenAI has been a huge win for both companies, catapulting them to the front of the AI race. But as OpenAI has grown, the terms of their original deal have become a point of contention.
Under the new agreement, Microsoft will no longer have the exclusive right to be OpenAI’s cloud provider. This is a big deal, as OpenAI has already announced a massive data center project, “Stargate,” that will use Oracle’s cloud services. However, OpenAI has also committed to purchasing $250 billion in services from Microsoft’s Azure platform.
The new deal also clarifies the terms around the holy grail of AI research: artificial general intelligence (AGI). Microsoft will now have rights to OpenAI’s technology, including anything developed after AGI is achieved, through 2032. However, it will lose access to OpenAI’s research once a third-party panel confirms the existence of AGI.
The new agreement clears a major hurdle for OpenAI’s plan to go for-profit and sets a new framework for the partnership that will define the next phase of the AI revolution.
