Microsoft now allows OpenAI to use competitors’ cloud services

OpenAI this week announced a joint venture with SoftBank and Oracle that will invest $500 billion to build new US data centers focused on developing artificial intelligence systems. This deal prompted OpenAI’s key investor, Microsoft, to relax the agreement between the companies, which obligated the former to use the cloud infrastructure of the latter.

Image source: Unsplash, BoliviaInteligente

An agreement between OpenAI and Microsoft has been in effect since 2019, according to which the latter had the exclusive right to build new data centers for the startup that created ChatGPT. Unveiled this week with the participation of Donald Trump, the Stargate project implies that OpenAI will have operational control over the initiative to build data centers in the United States. The initiative will make it possible to convene its own board of directors and CEO; in addition to SoftBank and Oracle, Stargate will also be financed by representatives of the UAE represented by MGX.

Microsoft, along with Nvidia and Arm, will play the role of technology partners, but they will not control any assets in the Stargate structure, unlike OpenAI. The chairman of the board of directors of Stargate will be Masayoshi Son, who heads SoftBank. As noted, Microsoft retains the exclusive right to provide customers with access to the OpenAI API, so the redistribution of revenue sources in favor of Oracle will not be so noticeable. Key provisions of Microsoft’s contract with OpenAI remain in place until 2030, with the latter recently confirming plans to use large parts of Azure infrastructure to train its language models. Microsoft can now formally refuse to participate in providing OpenAI with additional computing power, and after that the startup will be able to turn to competitors. OpenAI can also develop computing resources on its own without relying on Microsoft.

In the context of these events, Elon Musk once again emerged from the shadows, who, in an address to the judiciary, stated that the interest of the US Federal Trade Commission (FTC) in Microsoft’s $13 billion investment in OpenAI proves the non-competitive nature of these agreements. Musk is trying through the court to block the restructuring of OpenAI, which would allow the startup to be completely commercialized, and he saw evidence of his rightness in the actions of the FTC. The next hearing in the case is scheduled for February 4. Elon Musk, who launched his own startup xAI, sees OpenAI as a competitor, so his interest in regulating the activity of this company is understandable.