Microsoft (MSFT) is no longer the exclusive cloud partner of artificial intelligence (A.I.) start-up company OpenAI.
Microsoft has lost its role as the only provider of cloud computing capacity even though it is the largest investor in OpenAI, having allocated $13 billion U.S. to the privately held start-up.
In a blog post, Microsoft said that it’s still in a favorable position with OpenAI, stressing that as OpenAI seeks additional computing capacity, Microsoft will have a “right of first refusal.”
The change in the two companies’ relationship was disclosed as part of President Donald Trump’s announcement of the “Stargate Project,” a joint venture between OpenAI, Oracle (ORCL) and Softbank that will see those companies invest billions of dollars in AI infrastructure.
In 2019, three years before the launch of ChatGPT, Microsoft invested $1 billion U.S. in OpenAI, which committed to moving its services to the Azure cloud platform.
But as OpenAI’s computing needs have expanded, Microsoft signed contracts with third-party cloud providers, such as CoreWeave, to supplement its Azure cloud infrastructure.
Oracle is also now a part of the cloud computing mix for OpenAI. Last June, Oracle announced that Microsoft’s Azure A.I. platform would be extended to its cloud.
OpenAI said despite its evolving computing needs, it will continue to increase consumption of the Azure cloud.
Additionally, Microsoft still has rights to OpenAI’s intellectual property, which it is adding to products such as Copilot and the Bing search engine.
That said, the relationship between Microsoft and OpenAI has shown signs of strain in recent months.
In a podcast, Microsoft CEO Satya Nadella referred to OpenAI as a strategic competitor in A.I. and online search.
The stock of Microsoft has gained 8% over the last 12 months to trade at $428.50 U.S. per share.
