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Microsoft cuts OpenAI revenue share in a fresh step to loosen their AI alliance

SAN FRANCISCO (AP) — Microsoft said Monday it will no longer pay a share of its revenue to ChatGPT maker OpenAI, the latest move to untether a close partnership that helped unleash an artificial intelligence boom.

OpenAI relied exclusively on Microsoft’s investments in cloud computing services to build the technology that helped make ChatGPT a household name. Microsoft, in turn, relied on OpenAI’s technology to build its own AI assistant Copilot.

But the partnership has evolved as San Francisco-based OpenAI, founded as a nonprofit, has shifted to a capitalistic enterprise on a path toward an initial public offering on Wall Street and has balanced its reliance on Microsoft with other cloud partners like Amazon, Google and Oracle.

OpenAI said Monday it will continue to pay Microsoft a share of its revenue through 2030.

The two companies said Microsoft remains the primary cloud computing partner for OpenAI, and products made by the AI company will ship first on Microsoft’s cloud platform, called Azure, “unless Microsoft cannot and chooses not to support the necessary capabilities.”

Amazon CEO Andy Jassy described it as a “very interesting announcement” in a social media post Monday and said that Amazon will soon be making OpenAI’s models “available directly” on Amazon’s AI platform called Bedrock.

Wedbush Securities analyst Dan Ives said in a note to investors Monday that the new agreement “puts OpenAI on a strong path forward to going public through IPO given its clearer opportunity in the cloud environment while reducing significant barriers from its original partnership with Microsoft.”

Ives said it’s also important for Microsoft as it “looks to develop tech independence from OpenAI” in advancing Copilot’s capabilities and partnering with other AI providers such as OpenAI rival Anthropic, maker of the chatbot Claude.

Asian shares retreat as US stocks halt their record-breaking rally, while oil prices fall back

Asian shares retreated on Thursday following declines on Wall Street that snapped a nine-day winning streak for the S&P 500. Oil prices fell back after surging Wednesday as renewed fighting threatened the U.S.-Iran ceasefire. Early Thursday in Asia, Brent crude was $1.17 lower at $96.64 per barrel, while benchmark U.S. crude oil shed $1.08 to $94.94 per barrel. Oil prices had climbed a day earlier after both the United States and Iran said they launched retaliations for earlier attacks or attempted ones. In share trading, Japan's Nikkei 225 shed 1.9% to 67,101.83 as traders sold technology stocks to lock in gains. Energy and technology giant SoftBank Group slumped 10.4%, while Shin-Etsu Chemical dropped 3.8%.
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