OpenAI and Microsoft Reach Deal to Give Startup New Freedom - WSJ

OpenAI and Microsoft have signed a revised partnership agreement granting OpenAI more flexibility to collaborate with competing cloud providers, introducing a revenue-sharing cap set to expire in 2030, and removing a controversial clause from earlier contracts, according to the Wall Street Journal. The deal represents the third major revision since the partnership was established in 2023, reflecting ongoing tensions related to exclusivity and cost allocation.

Under the new terms, OpenAI is no longer required to route the majority of its compute demands through Azure exclusively, enabling the startup to explore contracts with other cloud vendors. Microsoft received certain guarantees: it retains a preferential but nonexclusive role as OpenAI's compute provider, maintains an observer seat on the nonprofit board, and receives a capped share of revenue until 2030, after which residual terms apply. Neither party exactly disclosed financial parameters but insiders commented cap-level was bound near mid-past one-year estimates.

The revision follows an investor and stakeholder push to disentangle overcentralised prior design and structure cloud competitiveness. Ample funding secured-venture note growth increased capacity in home platforms: Microsoft continues independently develop large models. OpenAI is converging massive valuation milestones approximated to date sized strongly above potential board-or-clause gap market report.