(Alliance News) - Microsoft and OpenAI announced a major revision of their landmark partnership on Monday, freeing the ChatGPT-maker to serve customers across competing cloud platforms.

The amended agreement, announced jointly by the two companies, reshapes the financial and commercial terms of a relationship that has been showing signs of strain as both sides encroached on each other's turf in recent months.

The revisions come as OpenAI pursues a long-anticipated initial public offering, with the cleaner financial terms viewed as providing greater clarity for prospective investors about the company's long-term obligations to Microsoft.

Microsoft has poured more than USD13 billion into OpenAI since their partnership began in 2019, making the software giant the startup's primary backer, exclusive cloud provider and a roughly 27% shareholder.

Under the deal, Microsoft's Azure remains OpenAI's primary cloud platform, and OpenAI products will continue to ship first on Microsoft's cloud - unless the company cannot or chooses not to support the required capabilities.

But crucially OpenAI is now free to offer all its products to customers on any cloud provider, a major shift from previous exclusivity constraints.

According to US media reports, the deal would also see OpenAI continue paying Microsoft a 20% revenue share through 2030, but payments will now be subject to a total cap – a significant concession that limits Microsoft's revenue from the partnership as OpenAI continues to grow.

Microsoft's license to OpenAI's intellectual property will run through 2032 but will transition from exclusive to non-exclusive – a change that opens the door for OpenAI to offer similar rights to rivals.

The revamped deal comes after the two companies struck a broader restructuring agreement in October, when OpenAI completed a recapitalization and committed to spending USD250 billion on Azure cloud services.

But OpenAI has since branched out its dealings to other tech giants, while Microsoft seeks to develop its own AI products independently from OpenAI.

In February, Amazon and OpenAI announced a major strategic partnership, with Amazon agreeing to invest up to USD50 billion in the company.

OpenAI also said it would expand its existing USD38 billion agreement with Amazon Web Services by USD100 billion over eight years.

Microsoft shares traded down 0.2% at USD423.94 each on Monday afternoon in New York.

source: AFP

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