Microsoft’s Status as OpenAI’s Exclusive Cloud Provider Comes to an End
President Donald Trump, Oracle Executive Chairman Larry Ellison, SoftBank CEO Masayoshi Son, and OpenAI CEO Sam Altman appeared at the White House on January 21, 2025, to announce a joint venture to fund artificial intelligence infrastructure. This comes after Microsoft, the largest investor in OpenAI and its principal cloud partner, will no longer be the exclusive provider of computing capacity for the startup.
According to a blog post by Microsoft, while the company still has a favorable position with OpenAI, going forward, Microsoft will have the “right of first refusal” before OpenAI can seek capacity from other parties. This change in their relationship was revealed as part of the Stargate Project announcement, a joint venture between OpenAI, Oracle, and SoftBank to invest billions of dollars in AI infrastructure in the United States.
As part of the partnership, Oracle will be a “key initial technology partner” alongside Arm, Microsoft, and Nvidia in setting up data center infrastructure for the project. Oracle Chairman Larry Ellison stated that the data centers are currently under construction, with the first being built in Texas and expected to expand to 20 and other locations.
In a blog post, OpenAI also noted that it will continue to increase its consumption of Azure, with Microsoft signing a new, large Azure commitment for products and model training recently. Microsoft still retains the rights to OpenAI’s intellectual property and has the exclusive on supplying computing requests for OpenAI’s application programming interface.
However, the relationship has shown signs of strain, with Microsoft naming OpenAI a competitor in July and Microsoft CEO Satya Nadella discussing the potential challenges that OpenAI’s big ambitions present in a podcast interview. The change in Microsoft’s relationship with OpenAI could be seen as a significant development in the AI space, with the joint venture and partnership with Oracle and SoftBank aiming to invest billions of dollars in AI infrastructure in the coming years.
