- Microsoft gives up exclusive rights to sell OpenAI‘s AI models, ending a key pillar of the early AI boom partnership.
- Investor Michael Burry calls the amended agreement “Good for MSFT” after recently taking a long position in the stock.
- OpenAI reportedly missed internal revenue and user targets, raising concerns about its financial runway.
Ace investor Michael Burry endorsed Microsoft‘s revised partnership with OpenAI on Monday, following an amended agreement between the two companies. This news comes as OpenAI faces internal scrutiny for reportedly missing its own financial goals.
Under the new deal, Microsoft will no longer have the exclusive right to sell OpenAI‘s models on its cloud platform. Consequently, OpenAI can now pursue deals with rivals like Amazon.com. In return, Microsoft stops paying a revenue share on OpenAI offerings sold through its Azure platform.
Burry, famous from “The Big Short,” said simply: “Good for MSFT.” He started a long position in the stock last week. The investor also recently purchased stakes in GameStop, Adobe, Paypal, and MSCI.
Microsoft stock has been under pressure, down 12% year-to-date. Analysts now anticipate its fiscal Q3 earnings report, scheduled for Wednesday. They expect revenue of $81.4 billion and adjusted earnings of $4.07 per share.
Meanwhile, OpenAI has missed internal targets for new users and revenue, according to a report in the Wall Street Journal. CFO Sarah Friar is reportedly worried the company might be unable to pay for future computing contracts. CEO Sam Altman has not commented on the report.
Separately, arguments begin Tuesday in Elon Musk‘s lawsuit against OpenAI and Altman. The Tesla CEO alleges the company strayed from its original mission by converting to a for-profit structure.
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