Context: Various antitrust authorities have recently been looking into strategic partnerships between large technology companies (particularly, but not exclusively, cloud service providers) and AI providers. The UK Competition & Markets Authority (CMA), which is presently undergoing a leadership change because the UK government is worried about the implications of the agency’s regulatory zeal for economic growth (January 22, 2025 article by Civil Service World), has already cleared three such arrangements, two of which involve Microsoft (September 27, 2024 ai fray article). On its way out, the leadership of the U.S. Federal Trade Commission (FTC) published a staff report on Generative AI that does not identify any particular behavior that would rise to an antitrust violation, yet discusses out-of-context contract terms and raises hypothetical concerns (January 17, 2025 ai fray article).
What’s new: This has been an eventful week for AI partnerships as President Donald Trump and tech leaders announced the Stargate Project, which will invest $500B in AI infrastructure in the United States over the course of four years. Microsoft and OpenAI are initial technology partners of that project, and the latter also an initial equity funder. Near-simultaneously, Microsoft explained in a January 21, 2025 corporate blog post the evolution of its partnership with OpenAI, which remains a close collaboration at least “through 2030” but give OpenAI more flexibility to procure AI infrastructure.
Direct impact: OpenAI continues to use Microsoft’s Azure cloud, but Microsoft will no longer be OpenAI’s exclusive supplier of compute. Microsoft continues to use OpenAI IP in its products like Copilot. At the same time., Microsoft also offers other models. The OpenAI API is exclusive to Azure (where it runs). Revenue-sharing agreements “flow both ways” according to Microsoft’s corporate blog.
Wider ramifications: While the original partnership already appeared far from a transaction that could be reviewed under merger laws, the adjustments made should dispel any residual concerns that competition watchdogs may have had.
Hardly a technology partnership has ever been discussed as much in public as Microsoft’s long-standing (since 2019) collaboration with OpenAI. Some of the terms are officially known, while others have been the subject of (sometimes corroborating) rumors or litigation, the latter particularly by Elon Musk and his xAI service that competes with OpenAI.
The two partners have gone to extreme lengths to preserve OpenAI’s autonomy while providing the degree of protection of its investment without which Microsoft could never have provided vast resources to OpenAI. Recently there has been talk about OpenAI and Microsoft looking for ways to respond in mutually beneficial ways to a changing environment. The Wall Street Journal claims to know that OpenAI was particularly interested in using Google cloud resources in addition to Azure (January 22, 2025 WSJ article).
Microsoft’s corporate blog post mentions “changes to the exclusivity on new capacity, moving to a model where Microsoft has a right of first refusal (ROFR).” Given how ROFR clauses normally work, this means that OpenAI can go to Microsoft and put forward a set of terms for Microsoft to accept. If Microsoft declines, but someone else (such as Amazon or Google) accepts, that particular set of terms, OpenAI is free to choose the other cloud provider. In practice, OpenAI would presumably talk to an alternative provider first before presenting Microsoft with a set of terms to accept or refuse.
In a CBNC interview at the World Economic Forum (WEF) in Davos, Switzerland, Microsoft chairman and CEO Satya Nadella viewed all these developments favorably. He made it sound like a natural evolution of the Microsoft-OpenAI partnership, and was quick to note that customers want choice, so Microsoft is trying to give it to them.
To the extent that antitrust authorities are still looking into Microsoft’s partnership with OpenAI or have not stated that they have stopped looking into it (such as the UK CMA), it appears overdue to close the book. Not only have the terms of that colloboration evolved, but the Stargate Project also means that unprecedented levels of AI infrastructure are becoming additionally available.
Stargate funders and partners
Some of Stargate’s partners are funders, some are technology providers, and some are both. We have created the following table to make it easier to understand the initial lineup:
| Company | Equity Funder? | Technology Partner? |
| OpenAI | yes | yes |
| Oracle | yes | yes |
| SoftBank (Japan) | yes | no |
| MGX (UAE) | yes | no |
| Arm | no | yes |
| Microsoft | no | yes |
| NVIDIA | no | yes |
SoftBank and OpenAi are the lead partners, with SoftBank having operational responsibility (and its CEO Masayoshi Son becoming chairman) and OpenAI having operational responsibility.