Microsoft Loses Status as OpenAI's Exclusive Cloud Provider 8
Microsoft, the biggest investor in OpenAI and its principal cloud partner, is losing its designation as exclusive provider of computing capacity for the artificial intelligence startup. CNBC: In a blog post on Tuesday, Microsoft said that it's still in a favorable position with OpenAI. Going forward, when OpenAI seeks additional capacity, Microsoft will have the "right of first refusal" before OpenAI checks with other parties. The change in their relationship was disclosed as part of President Donald Trump's announcement of the Stargate Project, a joint venture with OpenAI, Oracle and Softbank to invest billions of dollars in AI infrastructure in the U.S.
Executives from those companies committed to invest an initial $100 billion and up to $500 billion over the next four years in the project, which will be set up as a separate company. Oracle is a "key initial technology partner" alongside Arm, Microsoft and Nvidia in setting up data center infrastructure, OpenAI said in a blog post. JPMorgan, in a note to clients: My takeaway is that MSFT is somewhat reading the room on capex. Softbank and Oracle are taking on some of the financial burden (in order to get some skin in the game) while MSFT still maintains access to OpenAI IP through to 2030 and has right of first refusal on any OpenAI new capacity. Feels like a good outcome for MSFT to me.
Executives from those companies committed to invest an initial $100 billion and up to $500 billion over the next four years in the project, which will be set up as a separate company. Oracle is a "key initial technology partner" alongside Arm, Microsoft and Nvidia in setting up data center infrastructure, OpenAI said in a blog post. JPMorgan, in a note to clients: My takeaway is that MSFT is somewhat reading the room on capex. Softbank and Oracle are taking on some of the financial burden (in order to get some skin in the game) while MSFT still maintains access to OpenAI IP through to 2030 and has right of first refusal on any OpenAI new capacity. Feels like a good outcome for MSFT to me.
The Devil in the Details. (Score:2)
Feels like a good outcome for MSFT to me.
We’ll see if that sentiment rings true. After all, you invited Oracle to the dining table. They don’t nibble politely.
Best read that EULA, Microsoft. The Devil, Esquire is funded handsomely through those details.
Re: (Score:2)
All agreed about Oracle - "they don't nibble politely" :-)
However, this may be a more shrewd move than it appears. MS still have first refusal, so they get to grow their cloud offering to whatever size they want (working on the assumption that AI is an endless resource hog). Remember, MS is a big OpenAI investor, so they're paying OpenAI to use MS Cloud. However, if Nvidia starts being stupid, or if MS just realise that their cloud footprint is getting a bit beyond sensible, then they can offload work to Or
Re: (Score:2)
The $500 Billion investment is private money "promised" and funneled through SoftBank. According to Elmo, Softbank has only $10 Billion, so the rest (assuming he's correct, big assumption) must come from others. I cannot see the others trusting SoftBank further than they can spit a two-headed rat. This will probably go into a dumpster fire like groups such as this usually do and with the usual recriminations.
The $500 Billion figure probably started out as $100 Billion until el Bunko stuck his dick into it.
They've lost the plot (Score:4, Insightful)
MS is pushing AI to the point they're damaging their products and it's decidedly anti-customer.
AI has value... just not in every nook and cranny and forcing it in there is damaging shiat. They need get back to actual features, not LLM magic sauce.
Re: (Score:2)
MS is pushing AI to the point they're damaging their products and it's decidedly anti-customer.
AI has value... just not in every nook and cranny and forcing it in there is damaging shiat. They need get back to actual features, not LLM magic sauce.
Microsoft doesn't much care about the features needed to use AI. Microsoft only cares about data aggregation for training sets and advertising. They call it AI, but in reality everything they do that they call AI amounts to hoovering your data into their servers. It's not a new phenomenon, but AI has given them a new excuse, and they *LOVE* using that excuse to suck up still more data.
Microsoft wants to diversify AI clients (Score:2)
Microsoft's infrastructure division (i.e. Azure Cloud) has too many AI eggs in the OpenAI basket.
This agreement allows Microsoft to court other customers and expand the infrastructure accordingly, in good years where they capture more customers than they churn, or in years when CAPEX for more capacity is tight, they will refuse more OpenAi capacity, and in the bad years, where they do not capture the expected number of clients, or churn too many, then all capacity needs from OpenAI will be absorbed by micro
Double Entendre Headlines Are Fabulous (Score:2)
Every company associated with AI scams loses status.