Microsoft Loses Status as OpenAI's Exclusive Cloud Provider

Microsoft, the biggest investor in OpenAI and its principal cloud partner, is losing its designation as exclusive provider of computing capacity for the artificial intelligence startup. CNBC: In a blog post on Tuesday, Microsoft said that it's still in a favorable position with OpenAI. Going forward, when OpenAI seeks additional capacity, Microsoft will have the 'right of first refusal' before OpenAI checks with other parties. The change in their relationship was disclosed as part of President Donald Trump's announcement of the Stargate Project, a joint venture with OpenAI, Oracle and Softbank to invest billions of dollars in AI infrastructure in the U.S.

Executives from those companies committed to invest an initial $100 billion and up to $500 billion over the next four years in the project, which will be set up as a separate company. Oracle is a 'key initial technology partner' alongside Arm, Microsoft and Nvidia in setting up data center infrastructure, OpenAI said in a blog post. JPMorgan, in a note to clients: My takeaway is that MSFT is somewhat reading the room on capex. Softbank and Oracle are taking on some of the financial burden (in order to get some skin in the game) while MSFT still maintains access to OpenAI IP through to 2030 and has right of first refusal on any OpenAI new capacity. Feels like a good outcome for MSFT to me.

Read more of this story at Slashdot.