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Can Microsoft keep its grip on OpenAI?

MICROSOFT

Microsoft is no longer OpenAI’s sole data centre provider.

After OpenAI signed a new deal with SoftBank, Oracle, and others, Microsoft has updated its agreement with the AI company.

The new deal gives Microsoft “right of first refusal” for hosting OpenAI’s AI workloads.

This means Microsoft gets first choice to provide cloud services, but OpenAI can work with competitors if Microsoft can’t meet its needs.

OpenAI has also committed more to Microsoft’s Azure platform and gained approval to expand its own infrastructure for research and training.

Here’s what you should know:

  • Microsoft still gets priority for hosting OpenAI’s AI workloads but now faces competition.

  • OpenAI has increased its use of Azure while building its own computing systems.

  • The future of their partnership depends on AGI development and possible funding changes.

Priority? More like, ‘maybe’

Issues with computing power have delayed OpenAI’s products and created tension between the two companies.

In June, Microsoft allowed OpenAI to work with Oracle for extra capacity after pressure from shareholders.

Despite this, key parts of the partnership remain in place until 2030.

Microsoft retains access to OpenAI’s intellectual property, revenue-sharing agreements, and exclusivity on APIs.

However, if OpenAI develops artificial general intelligence (AGI) that earns $100 billion in profits, Microsoft will lose access to its technology under their agreement.

As OpenAI considers renegotiating funding, this shift highlights how the relationship between tech giants is evolving.

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