By Stephen Nellis and Krystal Hu
(Reuters) – Microsoft (MSFT) said on Tuesday it has changed some key terms of a deal with OpenAI after the maker of ChatGPT announced a joint venture with Oracle (ORCL) and Japan’s SoftBank Group to invest up to $500 billion in new AI to build data centers in the United States.
President Donald Trump gathered leaders of the “Stargate” effort at the White House on Tuesday to announce the deal, saying it was aimed at giving the United States an edge over China and other rivals in global AI race, using chips from Nvidia (NVDA).
Since 2019, Microsoft has had agreements with OpenAI that gave the Redmond, Washington-based company the exclusive right to build new computing infrastructure for OpenAI. Microsoft said in a blog post that it has “approved OpenAI’s ability to build additional capacity primarily for research and model training.”
That opened the door for OpenAI to start working with Oracle.
A person familiar with the deal said Stargate is a joint venture structured as a new entity in which OpenAI has an equity stake, management rights and operational control. There will be a separate board, appointed by the founding members, and its own CEO, this person said. The company will also have other investors, including United Arab Emirates company MGX.
Microsoft, along with Nvidia and Arm, will be a “technology partner” in the new venture, but is not listed as an equity backer. SoftBank CEO Masayoshi Son will become the entity’s chairman, according to a statement from OpenAI on social media site X.
But Microsoft said it still retains the exclusive right to offer OpenAI’s API – short for application programming interfaces, which is the main way software developers and enterprise customers purchase OpenAI’s services. That means Oracle won’t be able to host OpenAI’s main source of revenue.
Oracle did not immediately respond to a request for comment on Microsoft’s statements.
Microsoft said it has “revenue sharing agreements that go both ways” with OpenAI.
“Key elements of our partnership will remain in effect for the life of our contract through 2030, with our access to OpenAI’s IP, our revenue sharing arrangements and our exclusivity on OpenAI’s APIs all continuing,” said Microsoft.
Microsoft also said, “OpenAI recently made a new major Azure commitment that will continue to support all OpenAI products and training,” referring to Microsoft’s Azure cloud computing service.
(Reporting by Stephen Nellis in San Francisco and Krystal Hu in Davos, Switzerland; Editing by Christopher Cushing)