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OpenAI has won major concessions from its largest shareholder, Microsoft, that will allow it to sell products on AWS, while Microsoft gets more cash in a revenue-share agreement.
The new terms solve a critical issue that was hanging over OpenAI’s head since it signed its up-to-$50-billion deal with Amazon. Under the new agreement, Microsoft’s exclusive access to all of OpenAI’s products and IP is no longer open-ended — the partnership now has a definitive timeline. This contract gives Microsoft a nonexclusive license to OpenAI products, covering a six-year period.
The two companies are still calling Microsoft OpenAI’s “primary cloud partner,” meaning that the bulk of OpenAI’s cloud will likely be served by Azure for the six years this deal covers, even as OpenAI rushes to build its own data centers with other cloud providers.
OpenAI products will ship “first on Azure, unless Microsoft cannot and chooses not to support the necessary capabilities.” But, critically, “OpenAI can now serve all its products to customers across any cloud provider.”
The most important part of this term is that it eliminates the possibility that Microsoft could sue OpenAI over the AI lab’s deal with Amazon.
In exchange, OpenAI agreed to co-develop a “stateful runtime technology” on AWS Bedrock — the AWS service that serves up various AI models and services. Stateful runtime is the tech that supports AI agents, allowing them to remember tasks and context. OpenAI also promised that AWS would have exclusive rights to serve up its new agent-making tool, Frontier.
The original agreement with Microsoft prevented OpenAI from selling Frontier exclusively on AWS, and possibly prevented AWS from selling it at all. Microsoft retained exclusive rights to any OpenAI product accessed through an API. The same day OpenAI announced its AWS deal, Microsoft publicly refuted the AWS-exclusive terms, emphasizing that its terms were in effect until OpenAI achieved AGI. The Financial Times reported that Microsoft even contemplated legal action.
The new agreement eliminates Microsoft’s exclusive rights and solves the AWS legal peril. Amazon CEO Andy Jassy celebrated the deal on X, adding that it meant OpenAI’s models would become available to customers on AWS Bedrock in the coming weeks.
Source: TechCrunch