Microsoft and OpenAI end their exclusive and revenue-sharing deal

Opinions are my own.

I think the biggest winner of this might be Google. Virtually all the frontier AI labs use TPU. The only one that doesn't use TPU is OpenAI due to the exclusive deal with Microsoft. Given the newly launched Gen 8 TPU this month, it's likely OpenAI will contemplate using TPU too.

This agreement feels so friendly towards OpenAI that it's not obvious to me why Microsoft accepted this. I guess Microsoft just realized that the previous agreement was kneecapping OpenAI so much that the investment was at risk, especially with serious competition now coming from Anthropic?

This gives OpenAI the ability to goto AWS instead of exclusively on Azure. I guess Azure really is hanging on by a thread.

https://news.ycombinator.com/item?id=47616242

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%?

A wise man from Google said in an internal memo to the tune of: "We do not have any moat neither does anyone else."

Deepseek v4 is good enough, really really good given the price it is offered at.

PS: Just to be clear - even the most expensive AI models are unreliable, would make stupid mistakes and their code output MUST be reviewed carefully so Deepseek v4 is not any different either, it too is just a random token generator based on token frequency distributions with no real thought process like all other models such as Claude Opus etc.

Am I crazy, or was this press release fully rewritten in the past 10 minutes? The current version is around half the length of the old one, which did not frame it as a "simplification" "grounded in flexibility" but as a deeper partnership. It also had word salad about AGI, and said Azure retained exclusivity for API products but not other products, which the new statement seems to contradict.

What was I looking at?

Microsoft won the first around, now it's lagging far behind. CEO needs to go, it's so hard to ruin a play this badly.

Interesting side effect of this is that Google Cloud may now be the only hype scaler that can resell all 3 of the labs models? Maybe I'm misinterpreting this, but that would be a notable development, and I don't see why Google would allow Gemini to be resold through any of the other cloud providers.

Might really increase the utility of those GCP credits.

As former corporate restructuring lawyer…this kind of stuff indicates the cash strapped scramble of the end days.

This strikes me as a pullback by Microsoft. Coupled with some of the other news coming out of Microsoft it appears they are hoping to have "good enough" AI in their products. I think Microsoft knows they can win a lot of business customers by bundling with Office 365.

Wait, I thought OpenAI had to pay Microsoft until AGI was achieved or something? Am I misremembering? Is that a different thing?

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.

  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?

Related: GitHub has paused new signups for Copilot.

> Starting April 20, 2026, new sign-ups for Copilot Pro, Copilot Pro+, and student plans are temporarily paused.

From: https://docs.github.com/en/copilot/concepts/billing/billing-...

The original "AGI" agreement was always a bit suspect and open to wild interpretations.

I think this is good for OpenAI. They're no longer stuck with just Microsoft. It was an advantage that Anthropic can work with anyone they like but OpenAI couldn't.

It's kind of shocking, given financial transparency, that Microsoft gets away with not disclosing any details of this agreement (or the one it is replacing) to its shareholders. We know there's a cap on the revenue share from OpenAI to Microsoft, but we have no idea what that cap is (not whether it's higher, lower, or unchanged from the prior agreement).

We have no idea what it means to be the "primary cloud provider" and have the products made available "first on Azure". Does MSFT have new models exclusively for days, weeks, months, or years?

Both facts and more details from the agreement are quite frankly highly relevant to judge whether this is a net positive, negative or neutral for MSFT. It's unbelievable that the SEC doesn't force MSFT to publish at least an economic summary of the deal.

This quote from Matt Levine in 2023 feels relevant: https://www.bloomberg.com/opinion/articles/2023-11-20/who-co...

> And the investors wailed and gnashed their teeth but it’s true, that is what they agreed to, and they had no legal recourse. And OpenAI’s new CEO, and its nonprofit board, cut them a check for their capped return and said “bye” and went back to running OpenAI for the benefit of humanity. It turned out that a benign, carefully governed artificial superintelligence is really good for humanity, and OpenAI quickly solved all of humanity’s problems and ushered in an age of peace and abundance in which nobody wanted for anything or needed any Microsoft products. And capitalism came to an end.

That's a pretty good swap if you're Microsoft. Exclusivity was already unenforceable in practice, and they were going to have to either sue their biggest AI partner or let it slide. Instead they got the agi escape hatch closed and a revenue cap that at least makes the payments predictable

This sounds like an issue where the hyperscalers are acknowledging that the new Foundation model firms may in fact be worth more than they are. Anthropic looks increasingly likely to exceed AWS revenue next year, and OpenAI will likely do the same with Azure.

3 years ago a Foundation model seemed like a feature of a hyper scaler, now hyper scalers look like part of the supply chain.

Elon once said OpenAI will eat microsoft alive

It's unclear which elements of this new deal are binding versus promises with OpenAI characteristics. "Microsoft Corp. will publish fiscal year 2026 third-quarter financial results after the close of the market on Wednesday, April 29, 2026" [1]; I'd wait for that before jumping to conclusions.

[1] https://news.microsoft.com/source/2026/04/08/microsoft-annou...

Kagi Translate was kind enough to turn this from LinkedIn Speak to English:

The Microsoft and OpenAI situation just got messy.

We had to rewrite the contract because the old one wasn't working for anyone. Basically, we’re trying to make it look like we’re still friends while we both start seeing other people. Here is what’s actually happening:

1. Microsoft is still the main guy, but if they can't keep up with the tech, OpenAI is moving out. OpenAI can now sell their stuff on any cloud provider they want.

2. Microsoft keeps the keys to the tech until 2032, but they don't have the exclusive rights anymore.

3. Microsoft is done giving OpenAI a cut of their sales.

4. OpenAI still has to pay Microsoft back until 2030, but we put a ceiling on it so they don't go totally broke.

5. Microsoft is still just a big shareholder hoping the stock goes up.

We’re calling this "simplifying," but really we’re just trying to build massive power plants and chips without killing each other yet. We’re still stuck together for now.

OpenAI's logo is actually a depiction of their financial connections.

Inevitable, really...the deal made sense when OpenAI needed capital and Microsoft needed an AI story, but that has changed since. OpenAI is now valuable enough to act on its own, and keeping Microsoft as a privileged partner don't make much sense anymore...

Microsoft and OpenAI quietly killed the AGI clause. The provision that decided what happens when OpenAI builds human-level intelligence, gone. Six months ago that was the most important sentence in tech. Now it's a footnote in a revenu restructuring. Tells you everything about where the AGI conversation actually is.

Original source afaik here:

https://blogs.microsoft.com/blog/2026/04/27/the-next-phase-o...

So, silly question, does this mean I will be able to get OpenAI models via Bedrock soon?

> OpenAI has contracted to purchase an incremental $250B of Azure services, and Microsoft will no longer have a right of first refusal to be OpenAI’s compute provider.

Azure is effectively OpenAI's personal compute cluster at this scale.

Hopefully this means opeani wont exclusively distribute codex app through microsofts drm system

Biggest upside of this is I expect OpenAI models to be available on Bedrock, which is huge for not having to go back to all your customers with data protection agreements.

I used both copilot and kiro copilot sonet 1 copilot opus 3

kiro sonet 1.3 kiro opus 2.2

IMHO lot of people will switch to kiro and or deep seek it look like AWS done best inference google is another big player , has model and also cloud byt my 2 cents form Cents on AWS

this just validates why building multi-model routing is the future. if even microsoft couldn't lock down openai with $13b, enterprise customers definitely shouldn't lock themselves into a single ecosystem. the orchestration layer is about to get so valuable.

I assume this is part of why Github Copilot is going to usage billing. The cheap/free models in Copilot were OpenAI models. e.g. the GPT-based Raptor Mini, which was counted toward usage limits at a 0 multiplier, so basically unlimited usage for Pro and Pro+.

Glad to see AI is doing great.waiting for my 64 GB ddr5 ram for 200 dollars.

Really interesting. Why would Microsoft have done this deal? I'm a bit lost. Sure they get to not pay a revenue share _to_ OpenAI but surely that's limited to just OpenAI products which is probably a rounding error? Losing exclusivity seems like a big issue for them?

Interesting timing when one also considers that the Musk vs OpenAI trial is set to get underway.

https://www.dw.com/en/musk-vs-openai-trial-to-get-underway/a...

As time goes on, the value of the model will go down and the value of the tools will go up.

Have Copilot sales brought anything to coffins? Is Altman winner here again?

Good news for openAI, microsoft is the main blocker of innovation in the tech industry!

Pursue "new opportunities"? Microslop is dumping OpenAI and wishes it well in its new endeavors.

microsoft won't fool me here, as they are always engaging in accute sneakyness.

microsoft openai, microsoft rust, microsoft id software, etc...

So AWS can finally use OpenAI and not only OSS version.

Basically it seems that they didn't found yet a way to make money out of their models to keep the lights on...

Hopefully they put ChatGPT on Bedrock now.

"Advancing Our Amazing Bet" type post

so we can't use openai on MS now?

sounds like divesting behind a bit of nice-sounding scaffolding

The jig is up!

The AGI talk is shocking but not surprising to anyone looking at how bombastic Sam Altman's public statements are.

The circular economy section really is shocking- OpenAI committing to buying $250 Billion of Azure services, while MSFT's stake is clarified as $132 Billion in OpenAI. Same circular nonsense as NVIDIA and OpenAI passing the same hundred billion back and forth.

Alright my theory:

OpenAI has public models that are pretty 'meh', better than Grok and China, but worse than Google and Anthropic. They still cost a ton to run because OpenAI offers them for free/at a loss.

However, these people are giving away their data, and Microsoft knows that data is going to be worthwhile. They just dont want to pay for the electricity for it.

Does this mean AGI has been reached according to their mutually agreeable definition?

I think aws will seize the opportunity.

Why are do I see bloomberg links so often when this shit won't even let you read article without sub ? Do you not have better reasons to spend money?

Looks like MS is shafting OpenAI.

"We want to sell surveillance services to the US gov. MSFT was hesitant so we gave ourselves room to do it without them."

IM BURSTING INTO TEARS UNDER MY BLANKET

Two evil walk away. Well, is that good or bad?

I fear for the end user we'll still see more open-microslop spam. I see that daily on youtube - tons of AI generated fakes, in particular with that addictive swipe-down design (ok ok, youtube is Google but Google is also big on the AI slop train).

It’s insane how they talk about AGI, like it was some scientifically qualifiable thing that is certain to happen any time now. When I have become the javelin Olympic Champion, I will buy a vegan ice cream to everyone with a HN account.

OpenAI post: https://news.ycombinator.com/item?id=47921262

Tried to delete this submission in place of it but too late.

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Impossible to take any of this seriously when it constantly refers to AGI.

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Stop fucking linking paywalls ffs

Why is this being made public?