stclarke shares official details of the new Microsoft–OpenAI partnership agreement, focusing on revised intellectual property, Azure API exclusivity, and steps for advancing responsible AI innovation.

The Next Chapter of the Microsoft–OpenAI Partnership

Since 2019, Microsoft and OpenAI have collaborated to advance artificial intelligence responsibly and ensure its broad accessibility. This newly announced phase involves a definitive agreement that extends the depth of their partnership and outlines future opportunities.

Key Agreement Highlights

  • Public Benefit Corporation (PBC): Microsoft supports OpenAI’s transition to a PBC structure and recapitalization, valued at approximately $135 billion for Microsoft’s holding (around 27% ownership on an as-converted diluted basis).
  • Intellectual Property & API Rights: Microsoft retains exclusive intellectual property (IP) and Azure API exclusivity until AGI (Artificial General Intelligence) is declared. Rights extend through 2032 for models and products, including models post-AGI, with built-in safety guardrails.
  • Research IP: Microsoft’s rights to confidential research methods remain until AGI is independently verified or through 2030, whichever comes first. These rights exclude architecture, model weights, inference, fine-tuning code, and relevant data center IP, which remain with Microsoft as non-research IP.
  • Consumer Hardware & Joint Product Development: Microsoft’s IP rights no longer cover OpenAI’s consumer hardware. OpenAI may now jointly develop and launch certain products with third parties; joint API products must remain exclusive to Azure, while non-API products can use any cloud.
  • Independent AGI Pursuit: Microsoft is now free to pursue AGI alone or with new partners. If using OpenAI’s IP, model compute limits apply until AGI is declared, but thresholds are expanded.
  • Financial Provisions: Revenue sharing is maintained until AGI is verified, with an adjusted payment timeline. OpenAI is committed to $250B more in Azure purchases; Microsoft loses its previous right of first refusal for further compute contracts.
  • Broader Access and Openness: OpenAI can provide its APIs to U.S. national security customers regardless of cloud, and may release open-weight models that meet chosen capability levels.

Strategic Outlook

The agreement ensures that both organizations can continue innovating, building impactful products with a strong focus on responsible development and deployment of AI at industry scale. The restructured partnership sets the foundation for further breakthroughs in artificial intelligence, with Azure as a core platform.

For further details, read the original post: The next chapter of the Microsoft–OpenAI partnership.

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