OpenAI is reportedly undergoing significant shifts in its strategic partnerships and investment landscape. According to a report by The Information, this signals a significant change in OpenAI’s cloud computing approach and its long-term dependency on infrastructure providers.
Currently, Microsoft is OpenAI’s biggest cloud provider and investor, supplying vast amounts of AI computing power via Azure. However, SoftBank – nowadays in headlines for its aggressive AI investments – is likely heavily financing Stargate to build a competitive AI cloud infrastructure.
Interestingly, OpenAI is also a prominent part of the recently announced Stargate Project in the United States. Under this project, these companies intend to allocate around $500 billion over the next four years to strengthen AI infrastructure in the US.
And now, the ChatGPT maker is reportedly considering Stargate as a better alternative to funding computing capabilities. If successful, Stargate could rival Microsoft Azure, Amazon AWS, and Google Cloud in the AI computing space. It could reshape the market dynamics, possibly offering AI-specialized cloud services at lower costs.
However, OpenAI’s increasing spending on Microsoft’s data centers in the short term suggests the transition to Stargate will be gradual. But as per the report, by 2030, OpenAI expects three-quarters of its computing power to come from Stargate, meaning Microsoft will no longer be the dominant provider. According to the report, OpenAI expects to spend $20 billion in 2027, which is much more than the $5 billion it spent in 2024.
Speaking of potential advantages, depending less on Microsoft could give OpenAI more control over pricing, infrastructure decisions, and innovation. Microsoft’s involvement in OpenAI has been both an asset and a constraint, as OpenAI’s reliance on Azure limits its flexibility. Additionally, by diversifying, OpenAI may also reduce potential regulatory concerns over its ties to Microsoft.
Earlier, last month Microsoft announced a change in its partnership with OpenAI, moving away from its previous exclusive role as the cloud provider for OpenAI’s computing needs. The new deal included a “right of first refusal” (ROFR) for Microsoft. As part of the amended agreement, Microsoft retains the first right to provide cloud resources to OpenAI, but OpenAI now has the option to turn to other cloud providers, such as Oracle, should Microsoft be unable to meet its needs.
OpenAI has raised a total of $17.9 billion in funding over 10 rounds. The Altman led company reached a valuation of approximately $157 billion in its last funding round in October 2024. Meanwhile, the current time is already critical for the company considering its plan to shift from a non-profit to a for-profit model.
