By Stephen Nellis and Krystal Hu
(Reuters) – Microsoft (MSFT) on Tuesday said it has modified some key terms of a take care of OpenAI after the ChatGPT creator announced a three way partnership with Oracle (ORCL) and Japan’s SoftBank Group to accumulate to $500 billion of latest AI data centers in the US.
President Donald Trump gathered the leaders of the “Stargate” effort on the White House on Tuesday to announce the deal, saying it was intended to assist keep the US ahead of China and other rivals in the worldwide AI race, using chips from Nvidia (NVDA).
Since 2019, Microsoft has had arrangements with OpenAI that gave the Redmond, Washington-based company the exclusive right to construct recent computing infrastructure for OpenAI. Microsoft, in a blog post, said it has “approved OpenAI’s ability to construct additional capability, primarily for research and training of models.”
That opened the door for OpenAI to work with Oracle.
An individual accustomed to the deal said that Stargate is a three way partnership structured as recent entity through which OpenAI has an equity stake, governance rights and operational control. It should have a separate board appointed by the founding members and its own CEO, this person said. The enterprise may also produce other investors including United Arab Emirates firm MGX.
Microsoft, together with Nvidia and Arm, might be a “technology partner” in the brand new enterprise, but shouldn’t be listed as an equity funder. SoftBank CEO Masayoshi Son is might be the entity’s board chairman, in line with a press release from OpenAI posted on social media site X.
But Microsoft said that it still retains the exclusive right to supply OpenAI’s API – technology shorthand for application programming interface, which is the important way that software developers and business customers buy OpenAI’s services. Meaning Oracle is not going to have the opportunity to host OpenAI’s primary income.
Oracle didn’t immediately reply to a request for comment on Microsoft’s statements.
Microsoft said it has “revenue sharing agreements that flow each ways” with OpenAI.
“The important thing elements of our partnership remain in place all through our contract through 2030, with our access to OpenAI’s IP, our revenue sharing arrangements and our exclusivity on OpenAI’s APIs all continuing forward,” Microsoft said.
Microsoft also said “OpenAI recently made a recent, large Azure commitment that may proceed to support all OpenAI products in addition to 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)