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Microsoft and OpenAI end their exclusive and revenue-sharing deal
21–30 of 915 posts
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#22Kagi Translate was kind enough to turn this from LinkedIn Speak to English:
The Microsoft and OpenAI situation just got messy.
We had to rewrite the contract because the old one wasn't working for anyone. Basically, we’re trying to make it look like we’re still friends while we both start seeing other people. Here is what’s actually happening:
1. Microsoft is still the main guy, but if they can't keep up with the tech, OpenAI is moving out. OpenAI can now sell their stuff on any cloud provider they want.
2. Microsoft keeps the keys to the tech until 2032, but they don't have the exclusive rights anymore.
3. Microsoft is done giving OpenAI a cut of their sales.
4. OpenAI still has to pay Microsoft back until 2030, but we put a ceiling on it so they don't go totally broke.
5. Microsoft is still just a big shareholder hoping the stock goes up.
We’re calling this "simplifying," but really we’re just trying to build massive power plants and chips without killing each other yet. We’re still stuck together for now.
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#23Biggest upside of this is I expect OpenAI models to be available on Bedrock, which is huge for not having to go back to all your customers with data protection agreements.
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#24Pursue "new opportunities"? Microslop is dumping OpenAI and wishes it well in its new endeavors.
In retrospect all those OAI announcements are gonna look so cringe.
They did not need to go so hard on the hype - Anthropic hasn’t in relative terms and is generating pretty comparable revenues at present.
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#25Microsoft Corp. will no longer pay revenue to OpenAI and said its partnership with the leading artificial intelligence firm will not be exclusive going forward. What does this mean that Microsoft will no longer pay revenue to OpenAI? How did the original deal work?
They were paying them 20% of the revenue from the hosted OpenAI products I believe?
Does this mean they will host OpenAI products but not pay them? Or does it mean they are paying them in some other way?
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#26> OpenAI has contracted to purchase an incremental $250B of Azure services, and Microsoft will no longer have a right of first refusal to be OpenAI’s compute provider.
Azure is effectively OpenAI's personal compute cluster at this scale.
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#27This agreement feels so friendly towards OpenAI that it's not obvious to me why Microsoft accepted this. I guess Microsoft just realized that the previous agreement was kneecapping OpenAI so much that the investment was at risk, especially with serious competition now coming from Anthropic?
> Microsoft will no longer pay a revenue share to OpenAI. I feel this looks like a nice thing to have given they remain the primary cloud provider. If Azure improves it's overall quality then I don't see why this ends up as a money printing press as long as OpenAI brings good models?
OpenAI was also threatening to accuse "Microsoft of anticompetitive behavior during their partnership," an "effort [which] could involve seeking federal regulatory review of the terms of the contract for potential violations of antitrust law, as well as a public campaign" [1].
[1] https://www.wsj.com/tech/ai/openai-and-microsoft-tensions-ar...
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#28Looks like MS is shafting OpenAI.
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#29This agreement feels so friendly towards OpenAI that it's not obvious to me why Microsoft accepted this. I guess Microsoft just realized that the previous agreement was kneecapping OpenAI so much that the investment was at risk, especially with serious competition now coming from Anthropic?
> Microsoft will no longer pay a revenue share to OpenAI. I feel this looks like a nice thing to have given they remain the primary cloud provider. If Azure improves it's overall quality then I don't see why this ends up as a money printing press as long as OpenAI brings good models?
Does this mean Microsoft gets OpenAI's models for "free" without having to pay them a dime until 2032?
And on top of that, OpenAI still has to pay Microsoft a share of their revenue made on AWS/Google/anywhere until 2030?
And Microsoft owns 27% of OpenAI, period?
That's a damn good deal for Microsoft. Likely the investment that will keep Microsoft's stock relevant for years.
Re: Microsoft and OpenAI end their exclusive and revenue-sharing deal
#30It’s insane how they talk about AGI, like it was some scientifically qualifiable thing that is certain to happen any time now. When I have become the javelin Olympic Champion, I will buy a vegan ice cream to everyone with a HN account.