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Microsoft and OpenAI end their exclusive and revenue-sharing deal

• deleted 6mo ago
  [deleted]
• aurareturn 6mo ago
  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?
  • Handy-Man 6mo ago
    They were paying them 20% of the revenue from the hosted OpenAI products I believe?
    • bilbo0s 6mo ago
      Does this mean they will host OpenAI products but not pay them? Or does it mean they are paying them in some other way?
      • Handy-Man 6mo ago
        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.
      • HarHarVeryFunny 6mo ago
        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.
        • borski 6mo ago
          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.
      • deaux 6mo ago
        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).
  • justinclift 6mo ago
    Wonder if this means Microsoft is actually going to be deploying Claude Code internally for usage? That might help fix some of the bugs in Teams... :)
  • alexdoesstuff 6mo ago
    It's unclear. That was never disclosed. It's similarly unclear what it means that they will no longer pay revenue share to OpenAI. Do they get the models for free now? How does OpenAI make money from the models hosted on Azure if not via revenue share?
• deleted 6mo ago
  [deleted]
• helsinkiandrew 6mo ago
  OpenAI post: https://news.ycombinator.com/item?id=47921262 https://news.ycombinator.com/item?id=47921262 Tried to delete this submission in place of it but too late.
  • dang 6mo ago
    Usually we prefer the best third-party article to corporate press releases (https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sort=byDate&type=comment&query=corporate%20press%20release%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...) - I've put a link to the latter in the top text above.
• aurareturn 6mo ago
  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.
  • Handy-Man 6mo ago
    It also restricted Microsoft from "partnering" with anyone else. Wouldn't be surprised if we see another news like Amazon, Alphabet investing in Anthropic.
    • aurareturn 6mo ago
      I don't think Microsoft ever had that restriction. They partnered with everyone already. https://blogs.microsoft.com/blog/2025/11/18/microsoft-nvidia-and-anthropic-announce-strategic-partnerships/ https://blogs.microsoft.com/blog/2025/11/18/microsoft-nvidia... https://azure.microsoft.com/en-us/blog/deepseek-r1-is-now-available-on-azure-ai-foundry-and-github/ https://azure.microsoft.com/en-us/blog/deepseek-r1-is-now-av... https://ai.azure.com/ https://ai.azure.com/
      • utopiah 6mo ago
        Also Mistral e.g. https://azure.microsoft.com/en-us/blog/microsoft-and-mistral-ai-announce-new-partnership-to-accelerate-ai-innovation-and-introduce-mistral-large-first-on-azure/ https://azure.microsoft.com/en-us/blog/microsoft-and-mistral... AFAICT they are just hedging their bets left and right still. Also feels like they are winning in the sense that despite pretty much all those products being roughly equivalent... they are still running on their cloud, Azure. So even though they seem unable to capture IP anymore, they are still managing to get paid for managing the infrastructure.
        • delecti 6mo ago
          Are they getting paid in actual money? Or are the AI companies "paying" their infrastructure bills with IOU/equity.
• aliljet 6mo ago
  Why is this being made public?
  • brookst 6mo ago
    It’s an agreement between a public company and a highly scrutinized private company. Several of the provisions will change what happens in the marketplace, which everyone will see. I imagine the thinking was that it’s better to just post it clearly than to have rumors and leaks and speculations that could hurt both companies (“should I risk using GCP for OpenAI models when it’s obviously against the MS / OpenAI agreement?”).
    • Schlagbohrer 6mo ago
      Also it's about OpenAI going public.
  • discordance 6mo ago
    Might have something to do with the MSFT quarterly report tomorrow
• ZeroCool2u 6mo ago
  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.
  • aurareturn 6mo ago
    Might not be good for Gemini long term if Anthropic and OpenAI can and will sell in every cloud provider they can find but businesses can only use Gemini via Google Cloud.
    • jfoster 6mo ago
      Good for Google Cloud, bad for Gemini = ??? for Google
    • stavros 6mo ago
      How is it good for Gemini that it's not available on two out of three major cloud platforms?
      • aurareturn 6mo ago
        It isn't. That's why I said "might not be good for Gemini".
        • stavros 6mo ago
          Oof, I completely missed that "not", thanks.
    • Melatonic 6mo ago
      Except Gemini might end up being far cheaper per token due to the infrastructure advantage
      • 6mo ago
• _jab 6mo ago
  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?
  • guluarte 6mo ago
    I think MS wants OpenAI to fail so it can absorb it
    • Oras 6mo ago
      MS put 10B for 50% if I remember correctly. OpenAI is worth many multiples of that.
      • bmitc 6mo ago
        > OpenAI is worth many multiples of that. How?
        • senordevnyc 6mo ago
          Because they recently issued shares at a price many multiples of that, and people bought them. How else would you define financial worth?
          • andriy_koval 6mo ago
            I would use your number adjusted by some demand elasticity curve.
            • tanseydavid 6mo ago
              The "back-of-the-napkin" only has enough room to estimate based on recently issued share price. Seems reasonable to me.
• airstrike 6mo ago
  "Advancing Our Amazing Bet" type post
• 31276 6mo ago
  Pursue "new opportunities"? Microslop is dumping OpenAI and wishes it well in its new endeavors.
  • iewj 6mo ago
    In retrospect all those OAI announcements are gonna look so cringe. They did not need to go so hard on the hype - Anthropic hasn’t in relative terms and is generating pretty comparable revenues at present.
    • JumpCrisscross 6mo ago
      > They did not need to go so hard on the hype - Anthropic hasn’t in relative terms and is generating pretty comparable revenues at present OpenAI bet on consumers; Anthropic on enterprise. That will necessitate a louder marketing strategy for the former.
      • eieiw 6mo ago
        That’s funny. Why is it Altman is facing kill shots and Dario isn’t?
        • JumpCrisscross 6mo ago
          > Why is it Altman is facing kill shots and Dario isn’t? Altman peaked in the zeiteist in 2023; Dario, much less prominently, in 2024 and now '26 [1]. I'd guess around this time next year, Dario will be as hated as Altman is today. [1] https://trends.google.com/explore?q=altman%2C%20Dario&date=today%205-y&geo=US https://trends.google.com/explore?q=altman%2C%20Dario&date=t...
        • scottyah 6mo ago
          Dario is a lot more focused on enabling people with AI, Sam goes on interviews like he's Wormtongue trying to summon a "god". Then there is the whole "open"ai where he took it closed source for profit, the engineers kicking sama out but he wiggled back in (at the cost of a lot of the founding engineers), the suspicious death of a whistleblower, the crazy investment schemes of billions of dollars that he's hoping taxes will save him from, the immediate curtailing to Pete in the DoD, and a few other things that make him at least a highly questionable fellow. Dario left OpenAI because of the bad he saw there, and made a superior product (though these things change very rapidly).
• ath3nd 6mo ago
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• airstrike 6mo ago
  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.
  • azinman2 6mo ago
    This was actually really helpful. I feel like it should be done for all PR speak.
    • JumpCrisscross 6mo ago
      It's better than the original, but still off. "The Microsoft and OpenAI situation just got messy" is objectively wrong–it has been messy for months [1]. Nos. 1 through 3 are fine, though "if they can't keep up with the tech, OpenAI is moving out" parrots OpenAI's party line. No. 4 doesn't make sense–it starts out with "we" referring to OpenAI in the first person but ends by referring to them in the third person "they." No. 5 is reductive when phrased with "just." It would seem the translator took corporate PR speak and translated it into something between the LinkedIn and short-form blogger dialects. [1] https://www.wsj.com/tech/ai/openai-and-microsoft-tensions-are-reaching-a-boiling-point-4981c44f?mod=article_inline https://www.wsj.com/tech/ai/openai-and-microsoft-tensions-ar...
      • Maxatar 6mo ago
        Being objectively correct isn't the goal of the translator, the translator can't possibly know if a statement is truthful. What the translator does is well... translate, specifically from some kind of corporate speak that is really difficult for many people including myself to understand, into something more familiar. I don't expect the translation to take OpenAI's statements and make them truthful or to investigate their veracity, but I genuinely could not understand OpenAI's press release as they have worded it. The translation at least makes it easier to understand what OpenAI's view of the situation is.
• Eridrus 6mo ago
  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.
  • easton 6mo ago
    Isn’t that an “API product”? I read this assuming the whole point of renegotiation was to let OpenAI sell raw inference via bedrock, but that still seems to be blocked except for selling to the US Government.
  • fengkx 6mo ago
    > OpenAI can now jointly develop some products with third parties. API products developed with third parties will be exclusive to Azure. Non-API products may be served on any cloud provider. This seems impossible.
    • Eridrus 6mo ago
      I think they updated the article since you grabbed this line. Amazon CEO says that these models are coming to Bedrock though: https://x.com/ajassy/status/2048806022253609115 https://x.com/ajassy/status/2048806022253609115
      • fengkx 6mo ago
        [dead]
• jryio 6mo ago
  > 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.
  • JumpCrisscross 6mo ago
    What fraction of Azure compute does OpenAI represent? (Does the $250bn commitment have a time period? Is it legally binding?)
    • runako 6mo ago
      Azure did $75B last quarter. That article doesn't give a timeframe, but most of these use 10 years as a placeholder. I would also imagine it's not a requirement for them to spend it evenly over the 10 years, so could be back-loaded. OpenAI is a large customer, but this is not making Azure their personal cluster.
    • deleted 6mo ago
      [deleted]
  • einrealist 6mo ago
    I wonder how this figure was settled. Is it based on consumer pricing? Can't Microsoft and OpenAI just make a number up, aside from a minimum to cover operating costs? When is the number just a marketing ploy to make it seem huge, important and inevitable (and too big to fail)?
  • deleted 6mo ago
    [deleted]
• m3kw9 6mo ago
  Looks like MS is shafting OpenAI.
• delis-thumbs-7e 6mo ago
  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.
  • hx8 6mo ago
    Do the investments make sense if AGI is not less than 10 years away?
    • JumpCrisscross 6mo ago
      > Do the investments make sense if AGI is not less than 10 years away? They can. If one consolidated the AI industry into a single monopoly, it would probably be profitable. That doesn't mean in its current state it can't succumb to ruionous competition. But the AGI talk seems to be mostly aimed at retail investors and philospher podcasters than institutional capital.
      • iewj 6mo ago
        What kind of ludicrous statement is this? Any monopoly with viable economics for profit with no threat of competition yields monopoly profits…
        • JumpCrisscross 6mo ago
          > Any monopoly with viable economics for profit with no threat of competition yields monopoly profits "With viable economics" is the point. My "ludicrous statement" is a back-of-the-envelope test for whether an industry is nonsense. For comparison, consolidating all of the Pets.com competitors in the late 1990s would not have yielded a profitable company.
          • eieiw 6mo ago
            Very convenient to leave out Amazon in your back of the envelope test, whose internal metrics were showing a path toward quasi-monopoly profits. Do you argue in good faith? There’s a difference between being too early vs being nonsense.
• chickoeafilae 6mo ago
  [flagged]
• freejazz 6mo ago
  Impossible to take any of this seriously when it constantly refers to AGI.
  • Schlagbohrer 6mo ago
    Especially when the OpenAI definition of AGI is only in financial terms (when it becomes profitable), which can be easily manipulated.
• JumpCrisscross 6mo ago
  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-announces-quarterly-earnings-release-date-67/ https://news.microsoft.com/source/2026/04/08/microsoft-annou...
  • davidgerard 6mo ago
    Very annoyed Microsoft's words were extruded corporate spam reiterating the press release and how great this deal was.
• TheAtomic 6mo ago
  "We want to sell surveillance services to the US gov. MSFT was hesitant so we gave ourselves room to do it without them."
  • Schlagbohrer 6mo ago
    Extremely hard to believe that MSFT would have any hesitancy about working with the US government.
• Schlagbohrer 6mo ago
  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.
  • ModernMech 6mo ago
    Dennis: I think we made every single one of our Paddy's Dollars back, buddy. Mac: You're damn right. Thus creating the self-sustaining economy we've been looking for. Dennis: That's right. Mac: How much fresh cash did we make? Dennis: Fresh cash! Uh, well, zero. Zero if you're talking about U.S. currency. People didn't really seem interested in spending any of that. Mac: That's okay. So, uh, when they run out of the booze, they'll come back in and they'll have to buy more Paddy's Dollars. Keepin' it moving. Dennis: Right. That is assuming, of course, that they will come back here and drink. Mac: They will! They will because we'll re-distribute these to the Shanties. Thus ensuring them coming back in, keeping the money moving. Dennis: Well, no, but if we just re-distribute these, people will continue to drink for free. Mac: Okay... Dennis: How does this work, Mac? Mac: The money keeps moving in a circle. Dennis: But we don't have any money. All we have is this. ... How does this work, dude!? Mac: I don't know. I thought you knew.
    • slickytail 6mo ago
      You forgot the best line: "I don't know how the US economy works, much less some kind of self-sustaining one".
    • ksimukka 6mo ago
      Great scene
• sourraspberry 6mo ago
  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.
  • scottyah 6mo ago
    Just some of the games sama is playing.
• concinds 6mo ago
  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?
  • einsteinx2 6mo ago
    I noticed the exact same thing. I read the original, went back to read it again and it’s completely changed.
    • 3form 6mo ago
      I think a stickied comment about this would be due. No idea if it's possible to call in @dang via at-name?
      • einsteinx2 6mo ago
        Looks like they changed the post link to a Bloomberg article instead but kept the comments thread. So I guess he’s already aware.
      • kergonath 6mo ago
        > No idea if it's possible to call in @dang via at-name? No. Email hn@ycombinator.com https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html
  • antonkochubey 6mo ago
    They forgot the "hey ChatGPT, rewrite this to have better impact on the company stock" before submitting it
  • alansaber 6mo ago
    The in-house or the marketing team swooped in last minute it appears
• martinald 6mo ago
  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?
• chasd00 6mo ago
  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 https://news.ycombinator.com/item?id=47616242
  • Donald 6mo ago
    Isn't this expected if OpenAI models are going to be listed on AWS GovCloud as a part of the Anthropic / Hegseth fall-out?
  • xvilka 6mo ago
    And Azure still doesn't support IPv6, looking at the GitHub[1]. [1] https://github.com/orgs/community/discussions/10539 https://github.com/orgs/community/discussions/10539
    • deleted 6mo ago
      [deleted]
    • awestroke 6mo ago
      Well, you see, they just can't find a checkbox for ipv6 support in the IIS GUI on their ingress servers.
    • jabl 6mo ago
      Perhaps they should use OpenAI models to figure out how to rollout IPv6.
      • brazukadev 6mo ago
        Now they can use Claude Code.
      • ignoramous 6mo ago
        Some food for thought: If GitHub flipped a switch and enabled IPv6 it would instantly break many of their customers who have configured IP based access controls [1]. If the customer's network supports IPv6, the traffic would switch, and if they haven't added their IPv6 addresses to the policy ... boom everything breaks. This is a tricky problem; providers don't have an easy way to correlate addresses or update policies pro-actively. And customers hate it when things suddenly break no matter how well you go about it. https://news.ycombinator.com/item?id=47790889 https://news.ycombinator.com/item?id=47790889
• 1f60c 6mo ago
  Wait, I thought OpenAI had to pay Microsoft until AGI was achieved or something? Am I misremembering? Is that a different thing?
  • dist-epoch 6mo ago
    [dead]
  • ksherlock 6mo ago
    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)
  • staminade 6mo ago
    My understand was that was in relation to IP licensing. Microsoft got access to anything OpenAI built unless they declared they had developed AGI. This new article apparently unlinks revenue sharing from technology progress, but it's unclear to me if it changes the situation regarding IP if OpenAI (claim to) have achieved AGI.
  • maplethorpe 6mo ago
    I wouldn't be surprised if they had already, internally. An OpenAI employee tweeted today that Codex has achieved "escape velocity" and is now improving rapidly. Make of that what you will.
• chasil 6mo ago
  https://archive.ph/5lTPy https://archive.ph/5lTPy
  • moi2388 6mo ago
    Doesn’t work
• monkeydust 6mo ago
  Original source afaik here: https://blogs.microsoft.com/blog/2026/04/27/the-next-phase-of-the-microsoft-openai-partnership/ https://blogs.microsoft.com/blog/2026/04/27/the-next-phase-o...
• freediddy 6mo ago
  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%?
  • PunchyHamster 6mo ago
    Why would they acquire more when company is still not making profit ? To be left with bigger bag ?
  • dijit 6mo ago
    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).
    • freediddy 6mo ago
      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?
• jhk482001 6mo ago
  So AWS can finally use OpenAI and not only OSS version.
• eranation 6mo ago
  So, silly question, does this mean I will be able to get OpenAI models via Bedrock soon?
  • aenis 6mo ago
    Likely, and via vertex on gcp (or whatever they are calling it this year). Which also means, if you are a big boring AWS or GCP shop, and have a spend commitment with either as part of a long term partnership, it will count towards that. And, you won't likely have to commit to a spend with OpenAI if you want the EU data residency for instance. And likely a bit more transparency with infra provisioning and reserved capacity vs. OpenAI. All substantial improvements over the current ways to use OpenAI in real production.
  • conradkay 6mo ago
    Yes, https://x.com/ajassy/status/2048806022253609115 https://x.com/ajassy/status/2048806022253609115 (Andy Jassy) "Very interesting announcement from OpenAI this morning. We’re excited to make OpenAI's models available directly to customers on Bedrock in the coming weeks, alongside the upcoming Stateful Runtime Environment. With this, builders will have even more choice to pick the right model for the right job. More details at our AWS event in San Francisco tomorrow."
    • deleted 6mo ago
      [deleted]
• cdrnsf 6mo ago
  OpenAI's logo is actually a depiction of their financial connections.
• jonahs197 6mo ago
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• saadn92 6mo ago
  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
• Linuxislife 6mo ago
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• sayYayToLife 6mo ago
  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.
  • alexdoesstuff 6mo ago
    Small nitpick: the models probably make some money on actual inference. Might not be a massive amount, but hard to see them not having a positive contribution margin purely on inference. What's losing OpenAI money is paying for the whole of R&D, including training and staff. Microsoft doesn't pay that, so they get the money making part of AI without the associated costs.
    • sayYayToLife 6mo ago
      [dead]
• shaguoer 6mo ago
  [flagged]
• thanhhaimai 6mo ago
  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.
  • maxclark 6mo ago
    And almost by happenstance Apple. Turns out they have a great platform for inference and torched almost nothing comparatively on Siri. The Apple/Gemini deal is interesting, Google continues to demonstrate their willingness to degrade their experience on Apple to try and force people to switch.
    • bigyabai 6mo ago
      Apple is basically in the same boat as AMD and Intel. They have a weak, raster-focused GPU architecture that doesn't scale to 100B+ inference workloads and especially struggles with large context prefill. TPUs smoke them on inference, and Nvidia hardware is far-and-away more efficient for training.
      • brcmthrowaway 6mo ago
        This doesn't get talked about enough - the GPU is weak, weak, weak. And anyone who can fix them will go to a serious AI company (for 2-3x the salary).
        • jorvi 6mo ago
          The GPU is monstrously good. Depending on the workload, the M1 series GPU using 120W could beat an RTX 3090 using 420W. Same with the CPU. Linux compiled faster on an M1 than on the fastest Intel i9 at the time, again using only 25% of the power budget. And the M-series has only gotten better. It is kind of sad Apple neglects helping developers optimize games for the M-series because iDevices and MacBooks could be the mobile gaming devices.
• shevy-java 6mo ago
  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).
• squirrelon 6mo ago
  [dead]
• dhruv3006 6mo ago
  I think aws will seize the opportunity.
• theturtle 6mo ago
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• exec7 6mo ago
  Good news for openAI, microsoft is the main blocker of innovation in the tech industry!
• jachva95 6mo ago
  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?
• herodoturtle 6mo ago
  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-76948411 https://www.dw.com/en/musk-vs-openai-trial-to-get-underway/a...
• moi2388 6mo ago
  Stop fucking linking paywalls ffs
• alexdoesstuff 6mo ago
  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.
  • trvz 6mo ago
    It’s American Business as usual. Personally I’m miffed how little data Apple needs to provide about product categories, and especially about how much they’ve burnt on the car program. If they shared any data about that at all some the leadership might end up having to take responsibility for mismanagement…
• synergy20 6mo ago
  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.
  • ethbr1 6mo ago
    Ah, so a familiar position for them, then!
  • dominotw 6mo ago
    what could ceo have done
    • noisy_boy 6mo ago
      true he is just the ceo
    • disqard 6mo ago
      Maybe not bragged "we made them dance"? That gloating aged poorly.
    • keeeba 6mo ago
      Not hired Suleyman? Build his own research lab? Satya made moves early on with OpenAI that should be studied in business classes for all the right reasons. He also made moves later on that will be studied for all the wrong reasons.
  • HerbManic 6mo ago
    The last year or so it is starting to look like Nadella is worried about his future. If these big plays don't pay off, he is out.
• muyuu 6mo ago
  sounds like divesting behind a bit of nice-sounding scaffolding
• GardenLetter27 6mo ago
  Hopefully they put ChatGPT on Bedrock now.
• wg0 6mo ago
  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.
  • didip 6mo ago
    I agree. Data and userbase are still the moats. Once a new model or a technique is invented, it’s just a matter of time until it becomes a free importable library.
  • kevin_thibedeau 6mo ago
    Can Deepseek answer probing questions about Winnie the Pooh?
    • harvey9 6mo ago
      Is it subject to CCP censorship? Maybe.
      • windexh8er 6mo ago
        It's fun to pretend the US models have no censorship constraints.
        • deleted 6mo ago
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        • zapnuk 6mo ago
          US models align with our "average" (western) values. If we outsource thinking by using LLMs, why would we outsource it to an LLM that doesn't have our values encoded in it?
• leonardoaraujo 6mo ago
  Basically it seems that they didn't found yet a way to make money out of their models to keep the lights on...
• gurjeet 6mo ago
  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-for-individuals https://docs.github.com/en/copilot/concepts/billing/billing-...
• simonw 6mo ago
  This quote from Matt Levine in 2023 feels relevant: https://www.bloomberg.com/opinion/articles/2023-11-20/who-controls-openai 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.
• SwellJoe 6mo ago
  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+.
• malchow 6mo ago
  As time goes on, the value of the model will go down and the value of the tools will go up.
• gla67890543 6mo ago
  Glad to see AI is doing great.waiting for my 64 GB ddr5 ram for 200 dollars.
• builderminkyu 6mo ago
  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.
• miohtama 6mo ago
  Have Copilot sales brought anything to coffins? Is Altman winner here again?
• lumost 6mo ago
  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.
  • nayroclade 6mo ago
    I think both got taken by surprise. Last year the talk was that AI was a bubble, demand was soft, pilots projects were failing, etc. Model providers still believed, but thought they had a long ramp up period to build out their own datacenters. Then in late Autumn/Winter, something happened. Model capability reached a threshold and demand exploded, then just kept exploding. Model firms are scrambling to find any compute capacity they can, which means striking any deals problem with hyper scalers. So question is whether model providers can get enough compute without having to effectively sell themselves to hyper scalers.
• etempleton 6mo ago
  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.
  • tokioyoyo 6mo ago
    Watch them make a deal with Anthropic.
    • etempleton 6mo ago
      It is possible! Anthropic is probably more in-line with the way Microsoft thinks about AI.
• 324 6mo ago
  IM BURSTING INTO TEARS UNDER MY BLANKET
• topce 6mo ago
  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
• deleted 6mo ago
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• j45 6mo ago
  Does this mean AGI has been reached according to their mutually agreeable definition?
• shaguoer 6mo ago
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• shaguoer 6mo ago
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• jcgrillo 6mo ago
  The jig is up!
• chinadata 6mo ago
  so we can't use openai on MS now?
• oomuinio 6mo ago
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• arcknighttech 6mo ago
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• digitaltrees 6mo ago
  As former corporate restructuring lawyer…this kind of stuff indicates the cash strapped scramble of the end days.
  • stingraycharles 6mo ago
    Seems more like OpenAI is planning to IPO and that would not have been possible within the previous arrangement, and Microsoft knows that.
  • that_was_good 6mo ago
    After they just raised 122 billion dollars?
    • danpalmer 6mo ago
      At those numbers it's all a silly game. How much of that was paid to shareholders rather than the business so they can cash out? How much of that is vendors buying future revenue? What liquidation preference is that at? From what has been reported it's clearly not as simple as raising 122 billion. Some folks called it "scraping the barrel", supposedly Anthropic has surpassed them on the secondary market, etc.
  • corentin88 6mo ago
    Can you elaborate?
    • digitaltrees 6mo ago
      When you reposition the core strategic posture of how you make money on very compressed time scales it’s because there is a massive cash crunch. They killed sora, the type of deal with Disney that should have been an 100 year strategic win, but wasn’t viable economically and they don’t have the assets to weather that storm. Same with a few other steps we are seeing them take. It all looks fine until it doesn’t. Once the cash crunch hits. It’s too late
• 3vo-ai 6mo ago
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• swordsith 6mo ago
  Hopefully this means opeani wont exclusively distribute codex app through microsofts drm system
• udugadoqehale 6mo ago
  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...
• brutuscat 6mo ago
  https://www.uberbin.net/archivos/estrategias/microsoft-openai-relacion-abierta-fin-exclusividad.php https://www.uberbin.net/archivos/estrategias/microsoft-opena...
• NikolaosC 6mo ago
  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.
  • lateral_cloud 6mo ago
    Thanks ChatGPT
  • stingraycharles 6mo ago
    Please don’t use AI to write comments on HN.
• arjunthazhath 6mo ago
  Elon once said OpenAI will eat microsoft alive
  • WhereIsTheTruth 6mo ago
    Microslop killed itself Partners with OpenAI then builds 4 products that compete with each other, runs out of compute despite owning datacenters and having infinite cash, then deploys it all in a way that makes people hate them (Copilot) And now they are out of chips That's always the moto with Microslop, buy what's good, established and liked by everyone, to then turn it to shit History repeats itself, this company should be dismantled
• sylware 6mo ago
  microsoft won't fool me here, as they are always engaging in accute sneakyness. microsoft openai, microsoft rust, microsoft id software, etc...
• tokenhub_dev 6mo ago
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• darqis 6mo ago
  But Microsoft owns OpenAI to a large part. How does that work?
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• lucy_hnatchuk 6mo ago
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