"Microsoft ( NASDAQ:MSFT ) unveiled yesterday what it describes as "the next chapter" in its evolving partnership with OpenAI, reaffirming the AI pioneer as its key frontier model collaborator. The announcement revealed Microsoft's acquisition of approximately 27% of OpenAI's for-profit OpenAI Group PBC business, valued at around $135 billion, while ushering in a new phase of artificial intelligence (AI) innovation. A standout element of this expanded pact is OpenAI's commitment to procure $250 billion in Azure cloud services, alongside newfound flexibility to partner with third parties."
"However, a key condition mandates that any API-based products - essentially interfaces enabling different software applications to exchange data and services -must run exclusively on Azure, while non-API offerings can leverage any cloud platform. This structure bolsters Microsoft's dominance, granting it intellectual property rights to OpenAI's breakthroughs until Artificial General Intelligence (AGI) is realized, effectively securing a near-term monopoly over the commercial AI layer."
"Supported by its recent five-year, $17.4 billion agreement with Microsoft to deliver AI infrastructure from its New Jersey data center - -potentially expanding to $19.4 billion if demand increases - Nebius is carving out a vital role in the industry. The market has yet to fully recognize the powerful multiplier effect this could have on NBIS stock, presenting investors with a timely opportunity to buy in now before it takes off."
Microsoft acquired approximately 27% of OpenAI's for-profit OpenAI Group PBC business for about $135 billion and positioned OpenAI as a key frontier model collaborator. OpenAI committed to procure $250 billion in Azure cloud services and gained flexibility to partner with third parties. Any API-based products must run exclusively on Azure, while non-API offerings may use any cloud platform. Microsoft obtained intellectual property rights to OpenAI breakthroughs until Artificial General Intelligence (AGI) is realized, securing a near-term commercial advantage. Nebius Group will supply critical GPU resources for Azure from a New Jersey data center under a five-year $17.4 billion agreement, potentially rising to $19.4 billion, positioning Nebius to benefit from increased OpenAI workloads.
Read at 24/7 Wall St.
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