Microsoft, OpenAI’s largest investor and primary cloud partner, is losing its exclusive status as the AI startup’s computing provider.
In a Tuesday blog post, Microsoft emphasized its continued strong position with OpenAI, noting it will have the “right of first refusal” when OpenAI seeks additional capacity, before exploring other options.
This shift in their partnership was revealed during President Trump’s announcement of the Stargate Project, a joint venture with OpenAI, Oracle, and SoftBank to invest billions in the U.S. AI infrastructure. The companies have committed $100 billion initially, with the potential for up to $500 billion over the next four years, forming a separate entity.
Oracle, alongside Arm, Microsoft, and Nvidia, will serve as a “key initial technology partner” for setting up AI data center infrastructure, according to OpenAI’s blog.
At a White House press conference with President Trump, Oracle Chairman Larry Ellison stated, “The data centers are actually under construction. The first of them are under construction in Texas. Each building is a half a million square feet. There are 10 buildings currently being built, but that will expand to 20 and other locations beyond the Abilene location, which is, which is our first location.”
Oracle’s stock rose 7% on Tuesday.
In 2019, three years before ChatGPT’s launch, Microsoft invested $1 billion in OpenAI, which agreed to use Azure for its services. As OpenAI’s computing needs grew, Microsoft turned to third-party cloud providers like CoreWeave to supplement its Azure infrastructure.
Oracle joined last year, announcing in June that Microsoft’s Azure AI platform would be integrated into Oracle’s cloud, despite Oracle trailing Amazon, Microsoft, and Google in the cloud market.
OpenAI confirmed on Tuesday it will continue increasing its use of Azure, with Microsoft stating that OpenAI recently made “a new, large Azure commitment” for products and model training. Microsoft retains rights to OpenAI’s intellectual property, which can be used in products like Copilot, and remains the exclusive provider of computing for OpenAI’s API.
However, the partnership has shown signs of tension, with Microsoft naming OpenAI as a competitor in July. In December, Microsoft CEO Satya Nadella discussed OpenAI CEO Sam Altman’s ambitious plans on a podcast with investors Brad Gerstner and Bill Gurley.
“What he wants to do, I have to accommodate for, so that he can do what he does,” Nadella said. “And he needs to accommodate for the discipline that we need on our end, given the overall constraints that we may have.”