OpenAI and Microsoft Are Partners, Until They Vie for the Same Customers

OpenAI's ChatGPT has enraptured the business world since its November release and OpenAI is signing up customers eager to pay to use its artificial intelligence models in their own products. But the Microsoft-backed startup faces a surprising rival: Microsoft itself. From a report: As part of its multibillion-dollar investment in OpenAI, Microsoft has the rights to sell the startup's software through its Azure cloud business, even as OpenAI licenses its own software directly to customers. Microsoft also gets a share of OpenAI's profits. The offerings cost the same, a fraction of a cent per query. Meanwhile, all of OpenAI's technology runs on Microsoft's Azure cloud infrastructure rent free. The dual offerings mean the companies are at times pitching the same customers on nearly identical products, putting salespeople at Microsoft in the uneasy position of trying to lure customers away from OpenAI while touting its technology.

While the profit-sharing agreement means sales of either offering theoretically benefit both companies, OpenAI pursues direct relationships with big customers, such as Microsoft rival Salesforce, which has licensed ChatGPT for a new suite of customer service software. It's not clear whether the partnership between OpenAI and Microsoft dictates the price each company sets for the models. Microsoft gets 75% of OpenAI's profits until its investment is paid back and 49% of subsequent profits up to a certain cap, The Information previously reported. It's also not clear how much profit Microsoft returns to OpenAI for the models it sells through Azure OpenAI Service. [...] An internal Microsoft document, viewed by The Information, instructs Azure salespeople to tell potential customers that OpenAI's own licenses are "great [for] experimentation" but have "limited enterprise-grade capabilities" and fewer "security/privacy features."

Re:

[narcc]

It's called 'Twitter' and the bots there will happily post all the racist and misogynistic comments you want between long-debunked conspiracy theories.

Re:

[laktech]

oh hey, i expect you'll be coming to the book burning event this Saturday?

Re:

[narcc]

You're confused. The book burners are the ones also posting racist and misogynist nonsense along with long-debunked conspiracy theories.

Every accusation is a confession with you freaks. It's getting old.

MS has no partners

[RUs1729]

It has interests. Today, it might be interested in partnering with you. Tomorrow it will not hesitate to stab you in the back, if that's aligned with its interests. The industry is littered with the corpses of many who partnered with MS.

Re:

[zimbolite]

That's the *old* Microsoft, the new Microsoft is much the same.

Four man professional wrestling

[Ed Tice]

Also water is wet. Author should watch WWE and see how four-man matches go down. There are always implicit alliances. Or if you don't like WWE, I think Hunger Games is a good alternative to demonstrate the same thing.

I bet on OpenAI developers

[sapgau]

I have no doubt people working at OpenAI are smart enough to reproduce and even improve any similar service offered by Microsoft. I don't want ChatGPT in Word, I want to interact directly with ChatGPT, copy what I need and paste it anywhere I want. That free use of Azure is tempting but I bet Google can sweeten the deal.

Same old tricks, new faces

[ITRambo]

Embrace, extend, extinguish lives on at Microsoft.

Shark Tank deal?

[edi_guy]

"Microsoft gets 75% of OpenAI's profits until its investment is paid back and 49% of subsequent profits up to a certain cap, "

This is a full-on, "Mr. Wonderful" type deal. I guess absent any funding and really needing that free cloud CPU time OpenAI did the best they could. I mean Google wasn't going to give them free stuff given their own AI initiatives. Amazon..I dunno probably too crooked to make a deal. MS with Azure was the best they could do. But ouch.

Sad that Musk could've funneled $10B to Ope

Re:

[Gibgezr]

Media is almost always considered a "good investment" by wealthy people who want to influence others. The miracle is that Elon bought it for all the wrong reasons, but I'm actually glad he has it. No, I don't worship at the feet of Elon, but he's so much less malign than the usual suspects. I mean, seriously, what if Rupert Murdoch bought twitter? Elon doesn't actually seem interested in making twitter into a mouthpiece for hit pieces that help his business adventures.
For Elon, twitter is a lousy investment