OpenAI and Microsoft negotiate licensing terms after ending exclusivity agreement
OpenAI and Microsoft ended their exclusivity agreement earlier this year, but they are yet to agree on the length of time Microsoft will have the right to licence OpenAI’s models.
The split came amid OpenAI’s frustration with Microsoft’s inability to meet its demand for computational resources. Now, the two are negotiating the length of time Microsoft will have the right to licence OpenAI’s models.
The partnership with Oracle signifies a “conscious uncoupling from Microsoft’s backend monopoly,” according to Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research. He added that it gives OpenAI greater strategic flexibility as it scales.
Neil Shah, VP for research at Counterpoint Research, says that diversifying beyond Microsoft for computing resources opens new opportunities for OpenAI. It also supports its potential IPO ambitions by reducing reliance on a single investor.
Oracle is spending around $40 billion on high-performance Nvidia chips to power a new data centre in Abilene, Texas. It’ll be one of the largest data centres in the world, providing 1.2 gigawatts of power when it’s completed in mid-2026.
The facility is part of the Stargate project, a $500 billion initiative to bolster America’s position in AI. It was first announced by former President Donald Trump in January 2025. OpenAI and SoftBank are each putting in $18 billion, while Oracle and the MGX sovereign wealth fund from Abu Dhabi are putting in another $7 billion. Construction began in June 2023 and Oracle has leased the facility for 15 years. The project is expected to house around 400,000 Nvidia GB200 chips.
Stargate also plans to go international, with a 5-gigawatt data centre in Abu Dhabi announced during Trump’s recent visit to the Gulf.
OpenAI has previously relied on Microsoft for over $13 billion worth of cloud services, but this new infrastructure will lessen that burden.
