OpenAI loosens Microsoft ties as Musk trial begins
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OpenAI revised its Microsoft contract, floated a Qualcomm hardware deal, and faced Elon Musk in court — all before lunch Monday.
Why it matters: OpenAI is rewriting the partnership that launched it while defending the legal premise on which it was built.
Between the lines: Both OpenAI and Microsoft are trying to get ahead of potential obstacles in a fast changing AI world, while also having greater clarity on their financial terms and the flexibility to craft deals with others.
Driving the news: Microsoft is giving up its exclusive right to sell access to OpenAI's models while remaining the AI giant's primary cloud provider.
- That frees OpenAI to expand its efforts with Amazon, which CEO Andy Jassy indicated is imminent.
- OpenAI could also sell its models through Google, assuming the two companies strike a deal.
- Also, under the new agreement, Microsoft will no longer share revenue with OpenAI, but OpenAI will still pay Microsoft 20% of its revenue through 2030, though those payments will now be capped at an undisclosed level.
Meanwhile, OpenAI is reportedly working on a deal with mobile chipmaker Qualcomm as OpenAI continues to plot its expansion into hardware.
- And in California, jury selection began in Musk's lawsuit over OpenAI's founding mission.
What they're saying: "Microsoft has increasingly signaled interest in a broader multi-model strategy, while OpenAI has clear incentives to expand distribution more broadly across the market" analysts with Evercore ISI wrote in a note to clients on Monday reports Bloomberg.
- A less exclusive OpenAI relationship still keeps Microsoft's Azure cloud busy (new models will still show up first on Azure) while avoiding over-dependence on one partner.
Yes, but: Microsoft faces growing pressure to have a coherent AI strategy above and beyond its OpenAI relationship.
Zoom out: OpenAI and rival AI lab Anthropic are locked in a race to define the enterprise AI market and to convince investors they deserve massive IPO valuations.
- Both companies are reportedly eyeing major public listings in late 2026.
- OpenAI's revised deal is widely viewed as IPO-friendly. It reduces perceived dependency risks on Microsoft, clarifies the financial relationship and frees the company to partner more broadly.
The bottom line: OpenAI is trying to make itself less dependent on Microsoft just as Musk is challenging how the company was built in the first place.
