OpenAI and Microsoft rewrite their deal: no more exclusivity, no more AGI clause

OpenAI is free to distribute its products through any cloud provider, Microsoft loses its exclusive license to OpenAI's technology, and the controversial AGI clause is gone.

OpenAI and Microsoft have fundamentally restructured their partnership agreement. Both companies say the new terms bring more clarity, flexibility, and predictability.

The biggest change: OpenAI can now sell its products through any cloud provider. Previously, the company was largely tied to Microsoft's Azure platform. Microsoft remains the primary cloud partner, and OpenAI products will still launch on Azure first - but the exclusivity is over.

According to The Information, the immediate trigger for renegotiation was OpenAI's plan to offer AI products on Amazon Web Services. Microsoft was concerned this could violate the existing Azure contract. Sam Altman and Satya Nadella reportedly negotiated the changes personally over the past few weeks.

The deal also eliminates the controversial AGI clause. That provision would have secured Microsoft's IP rights to OpenAI's technology until the company achieved so-called "artificial general intelligence." Instead, Microsoft now gets a non-exclusive license to OpenAI's models and products through 2032, regardless of how far the technology advances.

Revenue sharing now flows in only one direction

The financial structure is changing, too. According to The Information, Microsoft no longer pays a revenue share to OpenAI. Previously, Microsoft handed over 20 percent of the revenue it earned selling OpenAI models through Azure. OpenAI, on the other hand, still pays a revenue share to Microsoft - but only through 2030 and with an overall cap. The percentage stays the same, according to OpenAI.

Going forward, Microsoft benefits primarily through its role as a major shareholder, profiting directly from OpenAI's growth. The two companies also plan to collaborate on data centers, chips, and AI for cybersecurity.