Microsoft and OpenAI's New Transformation Agreement

Innovative Agreement Between Microsoft and OpenAI

Microsoft and OpenAI have decided to restructure their artificial intelligence (AI) partnership. As part of this, Microsoft will hold approximately 27% of OpenAI. The total value of this investment is estimated to be around 135 billion dollars. OpenAI is transitioning into a company structure that serves the public good with this new restructuring.

According to the agreement, OpenAI committed to purchasing Azure cloud services worth 250 billion dollars from Microsoft, but Microsoft has lost its first refusal right as OpenAI's computing provider.

Microsoft will extend the intellectual property rights over OpenAI's models and products until 2032 as part of the agreement. The two companies stated in a joint announcement, "As we enter a new phase in this partnership, we have signed a new definite agreement built on a strong foundation."

The information that regulators have approved this restructuring was also shared by the companies.

Microsoft has supported OpenAI both with its investments and through the rise of ChatGPT. However, under the leadership of CEO Sam Altman, OpenAI has begun to question the sustainability of its agreement with Microsoft by expanding collaborations with other companies.

The partnership began with Microsoft's 1 billion dollar investment in 2019 and was strengthened with additional investments in 2021 and 2023. During this time, OpenAI has become one of the world's most valuable startups, while Microsoft has emerged as a leader in the AI race.

However, OpenAI's board revealed internal turmoil by firing Altman. This incident highlighted the management issues OpenAI faces in balancing its non-profit past with its commercial goals.

With the new structure, OpenAI will gain the flexibility to develop its products with third parties and offer them on competitive cloud platforms. Altman said, "With this technology, we can encourage the world to establish new companies and applications." Additionally, among OpenAI's primary goals is an effort to treat diseases with a 25 billion dollar investment.

Microsoft, on the other hand, will have the opportunity to continue its artificial general intelligence (AGI) development efforts independently or with other partners. AGI refers to the development of artificial intelligence that either matches or surpasses human capabilities.