Microsoft relaxes data center grip on OpenAI amid $500 billion joint venture
Published On Jan 21, 2025, 8:29 PM
Microsoft has modified its partnership with OpenAI, allowing OpenAI to build new data center capabilities for artificial intelligence research and model training. This change comes as OpenAI announces a $500 billion joint venture named Stargate with Oracle and SoftBank Group to create AI data centers in the U.S., aimed at enhancing the U.S.'s competitive edge in the global AI landscape. Despite this modification, Microsoft retains exclusive rights to offer OpenAI's APIs, ensuring its control over OpenAI's primary revenue stream, while OpenAI continues its cloud commitments to Microsoft Azure.
Stock Forecasts
MSFT
Positive
Microsoft's strategic move to adjust its partnership with OpenAI while maintaining exclusivity on API offerings positions it strongly in the AI sector. The joint venture with Oracle may make OpenAI more competitive, but Microsoft's continued access to OpenAI’s technology and infrastructure ensures a steady revenue stream for Microsoft.
ORCL
Positive
Oracle's partnership with OpenAI enhances its capabilities in AI and data center infrastructure, potentially driving up its market value. This cooperation and the scale of the venture suggest growth prospects, despite not directly controlling OpenAI’s API.
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