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The specifics of the partnership between Microsoft and OpenAI have been made clear, and they include both positive and negative news for Microsoft.

One of OpenAI's largest backers, Microsoft has contributed billions of dollars to the AI startup and used its models as the foundation for Copilot. Microsoft and OpenAI have an exclusive contract that allowed OpenAI to use Azure as its cloud service.

According to the new deal, Microsoft will still have the right of first refusal but will no longer be OpenAI's sole cloud provider.

There were other facts that favored the Redmond company, even though the loss of its exclusive relationship is an intriguing development that some may view as a setback to Microsoft.

• Microsoft has the right to use OpenAI intellectual property (including the model and infrastructure) in our Copilot and other products. This implies that our clients can choose the model that best suits their requirements.
• The OpenAI API is offered through the Azure OpenAI Service and is only available on Azure. Customers will gain access to top models on Microsoft platforms and directly from OpenAI thanks to this agreement.
• Microsoft and OpenAI have revenue sharing agreements that run both ways, ensuring that both firms benefit from expanded use of new and old models.
• Microsoft remains a big stakeholder in OpenAI, giving funds and capacity to support their breakthroughs and, in turn, profiting from their growth in valuation.

The Intellectual Property of OpenAI

The fact that Microsoft has rights to OpenAI's intellectual property and can/will continue to use it as the foundation for Copilot is one of the most significant disclosures on the evolving relationship between the two companies.

Concern has been raised about Microsoft's reliance on OpenAI ever after CEO Sam Altman was fired by the startup's board. Amidst the ensuing turmoil, Microsoft was granted a seat on the board and underlined the significance of increased supervision and accountability inside OpenAI.

What would happen to Microsoft's AI products if it lost access to OpenAI's models was a more pressing matter. Regardless of OpenAI's standing, CEO Satya Nadella attempted to reassure investors that Microsoft could continue to advance AI.

Microsoft has released a number of its own in-house models as part of its efforts to expand its AI capabilities in the months following OpenAI's internal drama. Microsoft is reportedly looking at other options since it is worried "about the cost and speed for enterprise users."

Microsoft's emphasis on its "rights to OpenAI IP" is likely to reassure partners, investors, and consumers.