Per WSJ, previously, they both had revenue sharing agreements. MSFT will no longer send any revenue to OpenAI. OpenAI will still send revenue to MSFT until 2030 (with new caps)
The disparity in coverage on this new deal is fascinating. It feels like the narrative a particular outlet is going with depends entirely on which side leaked to them first.
Nadella had OpenAI by the short and curlies early on. But all I've seen from him in the last couple of years is continuously acquiescing to OpenAI's demands. I wonder why he's so weak and doesn't exert more control over the situation? At one point Microsoft owned 49% of OpenAI but now it's down to 27%?
Everything is personal preference, and perhaps I am more fiscally conservative because I grew up in poverty.
But if I own 49% of a company and that company has more hype than product, hasn't found its market yet but is valued at trillions?
I'm going to sell percentages of that to build my war chest for things that actually hit my bottom line.
The "moonshot" has for all intents and purposes been achieved based on the valuation, and at that valuation: OpenAI has to completely crush all competition... basically just to meet its current valuations.
It would be a really fiscally irresponsible move not to hedge your bets.
Not that it matters but we did something similar with the donated bitcoin on my project. When bitcoin hit a "new record high" we sold half. Then held the remainder until it hit a "new record high" again.
Sure, we could have 'maxxed profit!'; but ultimately it did its job, it was an effective donation/investment that had reasonably maximal returns.
(that said, I do not believe in crypto as an investment opportunity, it's merely the hand I was dealt by it being donated).
Microsoft didn't sell anything. OpenAI created more shares and sold those to investors, so Microsoft's stake is getting diluted.
And Microsoft only paid $10B for that stake for the most recognizable name brand for AI around the world. They don't need to "hedge their bets" it's already a humongous win.
Why let Altman continue to call the shots and decrease Microsoft's ownership stake and ability to dictate how OpenAI helps Microsoft and not the other way around?
I was under the impression that as long as GitHub doesn't support IPv6 it is a sign that they still haven't finished their migration to Azure. Azure supports IPv6 just fine.
Microsoft Corp. will no longer pay revenue to OpenAI and said its partnership with the leading artificial intelligence firm will not be exclusive going forward.
What does this mean that Microsoft will no longer pay revenue to OpenAI? How did the original deal work?
It seems that the old deal was exclusivity to MSFT with revenue share, and now no exclusivity, no revenue share.
Bear in mind that MSFT have rights to OpenAI IP (as well as owning ~30% of them). The only reason they were giving revenue share was in return for exclusivity.
This is a really common way to structure exclusivity; we did the same thing whenever customers requested it (and we couldn’t get rid of it entirely). Charge for the exclusivity explicitly.
If they wanted named exclusivity rather than general exclusivity, we would charge a somewhat smaller amount for each competitor they wanted exclusivity from. They could give up exclusivity at any time.
That was precisely how we structured our deal with Azure, back in 2014-2016 or so.
Azure was the only non-OpenAI provider that was allowed to provide OpenAI models. The comparison here is with Anthropic whose models are on both GCP and AWS (and technically also Azure though I think that might just be billing passthrough to Anthropic).
I suppose continue to host until the 2030/32 that they have access to but not share revenues when they use those models for their products like the bazillions of Copilots.
But if I own 49% of a company and that company has more hype than product, hasn't found its market yet but is valued at trillions?
I'm going to sell percentages of that to build my war chest for things that actually hit my bottom line.
The "moonshot" has for all intents and purposes been achieved based on the valuation, and at that valuation: OpenAI has to completely crush all competition... basically just to meet its current valuations.
It would be a really fiscally irresponsible move not to hedge your bets.
Not that it matters but we did something similar with the donated bitcoin on my project. When bitcoin hit a "new record high" we sold half. Then held the remainder until it hit a "new record high" again.
Sure, we could have 'maxxed profit!'; but ultimately it did its job, it was an effective donation/investment that had reasonably maximal returns.
(that said, I do not believe in crypto as an investment opportunity, it's merely the hand I was dealt by it being donated).
And Microsoft only paid $10B for that stake for the most recognizable name brand for AI around the world. They don't need to "hedge their bets" it's already a humongous win.
Why let Altman continue to call the shots and decrease Microsoft's ownership stake and ability to dictate how OpenAI helps Microsoft and not the other way around?
That's a flawed argument. Why wouldn't you want to hedge a risky bet, and one that's even quite highly correlated to Microsoft's own industry sector?
https://news.ycombinator.com/item?id=47616242
[1] https://github.com/orgs/community/discussions/10539
They still run their own platform.
https://thenewstack.io/github-will-prioritize-migrating-to-a...
Bear in mind that MSFT have rights to OpenAI IP (as well as owning ~30% of them). The only reason they were giving revenue share was in return for exclusivity.
If they wanted named exclusivity rather than general exclusivity, we would charge a somewhat smaller amount for each competitor they wanted exclusivity from. They could give up exclusivity at any time.
That was precisely how we structured our deal with Azure, back in 2014-2016 or so.
Tried to delete this submission in place of it but too late.
https://blogs.microsoft.com/blog/2026/04/27/the-next-phase-o...