It feels like the world’s longest and most public divorce: In late April, Microsoft and OpenAI once again renegotiated the slow-motion breakup that has been playing out between the two over the last several years. At first glance, it looks like a win-win. In the broadest terms, OpenAI gets more freedom to set its own course — it can sell its models to Microsoft competitors such as Amazon and Google, for example — while Microsoft gets a better revenue deal and first rights to the newest OpenAI technologies into the next decade. But in truth, one company got a better deal than the other. Who came out ahead? To figure that out, we first need to look at the most important details of the new agreement. A new deal after a lot of rancor Keep in mind that this new agreement didn’t arise from thin air. It’s a direct result of Microsoft’s threats in March to sue OpenAI when inked a $50 billion deal with Amazon that makes the latter company the only third-party cloud provider ⁠for ⁠OpenAI’s enterprise platform for building and running AI agents. After the Amazon-OpenAI contract was signed, Microsoft claimed it violated its exclusive cloud agreement with OpenAI. A Microsoft source told the Financial Times, “We know our contract. We will sue them if they breach it. If Amazon and OpenAI want to take a bet on the creativity of their contractual lawyers, I would back us, not them.” That led to negotiations, and ultimately the pact between Microsoft and OpenAI that loosens the bonds between the two companies, making it easier for them to go their own ways It also significantly changes the financial relationships between them. What OpenAI got The deal gave OpenAI what it desperately wanted — a fair amount of independence from Microsoft. The biggest plus for OpenAI is that it can now sell its AI models through companies other than Microsoft, including on Google Cloud and Amazon Web Services. (Until now the models were only available on Microsoft Azure.) With that new freedom, OpenAI can more easily chart its own course rather than have Microsoft determine it. OpenAI also gets something vital for its expected IPO — an eventual limit on the amount of money it has to pay to Microsoft. OpenAI now pays 20% of its revenue to Microsoft. Under the new terms, OpenAI will continue to pay until 2030, but the total amount of that payment will be capped. The companies haven’t disclosed what that cap is. The cap is vital for OpenAI, because investors will be more likely to buy OpenAI stock if the company’s long-term profitability isn’t weighed down by payments to Microsoft. What Microsoft got Microsoft gets a great deal, too. Even though OpenAI can now sell to Microsoft rivals, it remains OpenAI’s primary cloud partner; OpenAI products have to ship on Azure before they’re available from competitors. That gives Microsoft a considerable “first mover” advantage, because its customers will get OpenAI’s latest products before Amazon and Google’s customers will. The deal also extends Microsoft’s stranglehold on OpenAI intellectual property through 2032. Microsoft has been spending big on its own AI development, so by the time the exclusive arrangement ends, Microsoft will likely no longer need it. The deal will also do a lot to fatten Microsoft’s bottom line. It no longer has to pay OpenAI royalties for reselling OpenAI products on Azure. Instead, Microsoft now keeps all the revenue for itself. And, as outlined above, Microsoft still gets 20% of OpenAI’s revenue until the cap is reached. There’s one final hidden benefit: The new at-a-distance relationship between Microsoft and OpenAI makes it less likely Microsoft could be prosecuted under anti-trust laws in the US or overseas. The US Federal Trade Commission has already looked into the relationship several times, and issued a warning about potential antitrust violations. Then-FTC chair Lina Khan last year warned, “The FTC’s report sheds light on how partnerships by big tech firms can create lock-in, deprive start-ups of key AI inputs, and reveal sensitive information that can undermine fair competition.” So who’s the real winner? Microsoft comes out on top. It no longer has to pay royalties to OpenAI, retains first-mover rights to the latest OpenAI technology, keeps exclusive rights to the AI firm’s intellectual property through 2032, and gets 20% of OpenAI revenues until a cap is reached. In addition, the company is unlikely to be investigated for antitrust violations. Beyond that, it’s still a big stockholder in OpenAI, so it will share in OpenAI’s success. OpenAI certainly gets benefits as well — but they’re not nearly as significant as Microsoft’s. It’s yet one more example of how Microsoft has used its relationship with OpenAI to jump-start its own AI capabilities and feather its nest for the future.