Microsoft relaxes data center grip on OpenAI amid $500 billion joint venture

By Stephen Nellis and Krystal Hu

(Reuters) – Microsoft (MSFT) on Tuesday said it has changed some key terms of an agreement with OpenAI after creator ChatGPT announced a joint venture with Oracle (ORCL) and Japan’s SoftBank Group to build up to $500 billion of new AI data centers in the United States.

President Donald Trump met with leaders of the “Stargate” effort at the White House on Tuesday to announce the deal, saying it was intended to help keep the United States ahead of China and other rivals in the global AI race , using chips from Nvidia (NVDA).

Since 2019, Microsoft has had agreements with OpenAI that gave the company from Redmond, Washington, the exclusive right to build a new computing infrastructure for OpenAI. Microsoft, in a blog post, said it has “approved OpenAI’s ability to build additional capabilities, primarily for research and model training.”

That opened the door for OpenAI to work with Oracle.

A person familiar with the deal said Stargate is a joint venture structured as a new entity in which OpenAI has an equity stake, governance rights and operational control. It will have a separate board appointed by the founding members and its own CEO, this person said. The company will also have other investors including the United Arab Emirates firm MGX.

Microsoft, along with Nvidia and Arm, will be a “technology partner” in the new venture, but is not listed as an equity funder. SoftBank CEO Masayoshi Son will serve as chairman of the entity’s board, according to a statement OpenAI posted on social media site X.

But Microsoft said it still retains the exclusive right to offer OpenAI’s API — short for application programming interface technology — which is the main way software developers and business customers buy it. the services of OpenAI. This means that Oracle will not be able to host OpenAI’s primary source of revenue.

Oracle did not immediately respond to a request for comment on Microsoft’s statements.

Microsoft said it has “revenue sharing agreements that flow two ways” with OpenAI.

“The key elements of our partnership will remain in place for the duration of our contract through 2030, with our access to OpenAI’s IP, our revenue sharing agreements and our exclusivity on the “OpenAI APIs, all moving forward,” said Microsoft.

Microsoft also said that “OpenAI recently made a large new Azure commitment that will continue to support all OpenAI products and training,” referring to Microsoft’s Azure cloud computing service.

(Reporting by Stephen Nellis in San Francisco and Krystal Hu in Davos, Switzerland; Editing by Christopher Cushing)