Microsoft unbinds from OpenAI: shifts to non-exclusive, stops revenue sharing
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Microsoft and OpenAI’s partnership is undergoing a major restructuring.
On Monday, Microsoft and OpenAI announced revisions to their cooperation agreement. The key changes include Microsoft stopping payments of revenue sharing to OpenAI, and the licensing agreement shifting from exclusive to non-exclusive. This adjustment marks a significant overhaul in the long-term relationship between the two companies.
Under the revised agreement, Microsoft remains OpenAI’s primary cloud partner, and OpenAI products will be launched first on Azure. However, OpenAI can now offer its entire product suite to customers of any cloud service provider. Microsoft’s license for OpenAI IP will extend to 2032, but is now non-exclusive; OpenAI’s revenue sharing payments to Microsoft will continue until 2030, with the percentage remaining the same but a cap set on the total amount.
After the announcement, Microsoft’s share price fell as much as 4% in pre-market trading, hitting a nearly 10-day low during the session before recovering some losses. Amazon’s share price rose about 1%, as the market broadly expects Amazon will benefit from the non-exclusivity of OpenAI’s partnerships.
Core Terms of the Agreement: Exclusive Ties Lifted, Revenue Structure Reshaped
According to the joint statement from both companies, the amended agreement revolves around three principles: "flexibility, certainty, and the broad promotion for AI adoption."
In terms of cloud services, Microsoft retains its status as OpenAI’s primary cloud partner, and OpenAI products will still be launched first on Azure, but with an exception clause—if Microsoft cannot or chooses not to support the required capabilities, OpenAI may turn to other cloud providers. Additionally, OpenAI can now freely offer products to clients of any cloud platform, with the multi-cloud strategy explicitly guaranteed.
For licensing and revenue sharing, Microsoft’s license for OpenAI’s model and product IP extends until 2032, but is now non-exclusive. Meanwhile, Microsoft will no longer pay revenue share to OpenAI, but OpenAI’s revenue share payments to Microsoft will continue until 2030, these payments are independent of OpenAI’s technological advances, maintaining their original proportion but with an upper limit on the total amount.
Regarding equity, Microsoft will continue as OpenAI’s main shareholder and participate directly in its growth. After OpenAI’s restructuring to a for-profit model last year, Microsoft acquired a 27% stake in the company.
AGI Clause Controversy: Removing the ‘Superintelligence’ Trigger Mechanism
One of the most controversial terms in the previous agreement was a special arrangement tied to the AGI threshold. Previously, if OpenAI declared that its systems had reached AGI and this was certified by an expert committee, Microsoft’s exclusive access to its IP would end, and OpenAI could limit Microsoft’s access to future technologies.
This clause sparked ongoing debate due to the ambiguity of the AGI definition—there’s still no industry consensus on what AGI is. Reportedly, both parties engaged in several months of tense negotiations last year regarding this issue. The new agreement removes this trigger mechanism entirely, eliminating a major source of uncertainty in their relationship.
Evolution of the Relationship: From Deep Integration to Mutual Loosening
The previous partnership between the two companies was seen as the foundational link for OpenAI’s rise and the overall AI boom, but as OpenAI has expanded, the relationship has quietly changed.
In recent years, OpenAI has continued to broaden its cloud partnerships, including entering into agreements with Microsoft’s competitor Amazon to meet its growing computing needs and offer AI software services to a wider set of users. The latest agreement largely formalizes this reality—OpenAI gains more operational freedom, while Microsoft, through adjusted financial terms, attains a clearer cost structure.
In their joint statement, the two companies described the revision as "simplifying the collaboration model," and emphasized that they will continue to work closely in expanding data center capacities, next-generation chip development, and AI-powered cybersecurity initiatives.
Microsoft Under Pressure, Expectations for Amazon Gain Traction
The market reaction was clearly mixed following the announcement. Microsoft’s share price fell as much as 4% before the opening bell, but recovered most of the loss during regular trading; Amazon’s share price rose about 1%, as investors bet that the non-exclusivity of OpenAI's partnerships will bring more business opportunities to Amazon Web Services (AWS).
For Microsoft, halting revenue-sharing payments ends a fixed cost, but losing the exclusive license also weakens its moat in the AI infrastructure sector. The market's interpretation of this agreement revision reflects investors’ cautious evaluation of whether Microsoft can maintain its central position amid OpenAI’s multicloud strategy.
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