Satya Nadella says he’s ready to ‘exploit’ the new OpenAI deal

Source: TechCrunch

New OpenAI Partnership Details

Microsoft CEO Satya Nadella was asked point‑blank by a Wall Street analyst on Wednesday how its revised OpenAI partnership would impact Microsoft’s financials.

He said the new agreement was a good deal for everyone. “We feel good about our partnership with OpenAI. I’m always very focused on any partnership and ensuring that there’s a win‑win construct at all times. I mean, that’s how you can remain good partners.”

Nadella underscored that Microsoft has retained access to OpenAI’s intellectual property—including its models and agent products—but that it no longer has to pay OpenAI for them. Referring to royalty‑free access to OpenAI’s most advanced AI through 2032, he said:

“We have a frontier model, with all the IP rights that we will have access to all the way to ’32 and we fully plan to exploit it.”

There was speculation that the new deal, in which Microsoft no longer has exclusive access to OpenAI’s tech (TechCrunch), could cause the software giant to lose its edge in AI (Economic Times). OpenAI immediately announced exclusive AI products with Microsoft’s largest cloud rival, Amazon (TechCrunch), with Sam Altman and AWS CEO Matt Garman discussing their collaboration (Stratechery).

Financial Impact and Revenue

When Microsoft reported earnings on Wednesday—the last full quarter under the previous deal—the company said its AI business has surpassed an annual revenue run rate of $37 billion, up 123 % year‑over‑year.

Nadella noted that Microsoft also collects money from OpenAI in other ways:

“They’re a large customer of ours, not just on the AI accelerator side, but also on all the other compute sides. And so we want to serve them well. And then, of course, we have our equity.”

By “equity,” he is referring to OpenAI’s commitment to purchase more than $250 billion worth of Microsoft’s cloud services and Microsoft’s 27 % stake in OpenAI.

Enterprise Model Strategy

Nadella emphasized that enterprises often want to use multiple AI models, so OpenAI’s relative importance in the industry—especially to enterprises—is not as far ahead as it once was.

“We offer the broadest selection of models of any hyperscaler, so customers can choose the right model for the right workload across OpenAI, Anthropic, open source, and more. Over 10,000 customers have used more than one model.”

Outlook

Time will tell if this deal is truly a win‑win. In the meantime, Microsoft continues to deliver cloud growth and profits, as reported by CNBC.