Microsoft Relaxes Grip on OpenAI as $500 Billion AI Joint Venture Emerges

Microsoft has adjusted its deal with OpenAI, the creator of ChatGPT, to accommodate a new $500 billion AI data center joint venture announced by OpenAI with Oracle and SoftBank Group, according to Reuters.

The deal, dubbed "Stargate" and announced by President Donald Trump at the White House, aims to bolster the United States' position in the global AI race. It will utilize chips from Nvidia and involve a new entity in which OpenAI holds an equity stake, governance rights, and operational control.

While Microsoft previously held exclusive rights to build new computing infrastructure for OpenAI since 2019, it has approved OpenAI's ability to establish additional capacity, primarily for research and model training. This shift allows OpenAI to collaborate with Oracle on the Stargate project.

Microsoft, along with Nvidia and Arm, will serve as a "technology partner" in the joint venture, but will not be an equity funder. SoftBank CEO Masayoshi Son will chair the venture's board.

However, Microsoft maintains its exclusive right to offer OpenAI's API, the primary revenue stream for the company. This means Oracle will not be able to host OpenAI's principal source of income.

Microsoft, in a statement, noted that it retains "revenue-sharing agreements that flow both ways" with OpenAI. The company emphasized that key elements of its partnership with OpenAI, including intellectual property access, revenue-sharing arrangements, and exclusivity over OpenAI's APIs, will remain in place until 2030.