OpenAI, Microsoft Sign Preliminary Deal Revising Its Partnership After Relationship Strain Reports

Both OpenAI and Microsoft have announced that they signed a new preliminary deal that marks the first step towards revising the terms of their long-standing partnership, which has recently reportedly soured.

There have been significant moves made by both sides which were out of the ordinary in their partnership agreement that left the industry asking if they are still on good terms. One of those moves involved Microsoft reportedly speaking to Anthropic, an OpenAI rival, regarding the use of its Claude AI model to power its Office 365 Copilot features.

OpenAI, Microsoft Sign Preliminary Deal on Partnership

OpenAI and Microsoft shared a joint statement which revealed that both companies have signed a new preliminary deal focusing on a "non-binding memorandum of understanding (MOU) for the next phase of our partnership."

Both companies claimed that, while this new MOU has not specified anything yet, they are working towards finalizing the agreement for the future of their partnership.

According to the statement, the pair is working towards finalizing its contractual terms "in a definitive agreement" pertaining to their existing partnership, which was renewed last year.

Both OpenAI and Microsoft have not yet shared any concrete information as to what this new development may be, but speculations and reports have claimed that the relationship has soured between the two.

Reports of Relationship Strain Between the Partners

ArsTechnica revealed in its latest report that previous speculations have discussed the growing tensions between OpenAI and Microsoft's relationship, particularly as both companies are turning to other partners for their tech.

First, OpenAI is known for recently reaching a deal with Oracle for its AI infrastructure and cloud hosting needs, as well as joining the $500 billion Project Stargate initiative.

On the other hand, Microsoft turned towards the likes of Meta, xAI, DeepSeek, and, most recently, Anthropic, to look at AI models and chnology to power platforms like Azure, Office 365, and Copilot.

OpenAI and Microsoft's Relationship

Microsoft remains the largest backer behind OpenAI, with the Redmond-based software giant also being one of its longest partners as their relationship started in 2019. Since then, Microsoft has already invested $13 billion in Sam Altman's company to develop generative artificial intelligence technology, with 2024 seeing another $1 billion in funding.

While Microsoft remains a massive stakeholder of the company, the company was only given an observer seat last year amidst the firing and reinstating of Altman. However, Microsoft has given up that seat amidst the regulatory scrutiny over the company, but it still retained its investments in OpenAI and has not changed its partnership terms.

While the recent announcement assured the industry that their partnership will continue and that its latest deal is non-binding, many are left wondering what will happen to their relationship as both look elsewhere for partnerships.