AI Daily: Microsoft gives up exclusivity to OpenAI license

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly.

NON-EXCLUSIVE: Microsoft (MSFT) in a blog post announced changes to its partnership with OpenAI. It said, “Today, we are announcing an amended agreement to simplify our partnership and the way we work together, grounded in flexibility, certainty and a focus on delivering the benefits of AI broadly. The greater predictability in the amended agreement strengthens our joint ability to build and operate AI platforms at scale while providing both companies the flexibility to pursue new opportunities. The agreement spells out: Microsoft remains OpenAI’s primary cloud partner, and OpenAI product swill ship first on Azure, unless Microsoft cannot and chooses not to support the necessary capabilities. OpenAI can now serve all its products to customers across any cloud provider; Microsoft will continue to have a license to OpenAI IP for models and products through 2032. Microsoft’s license will now be non-exclusive; Microsoft will no longer pay a revenue share to OpenAI; Revenue share payments from OpenAI to Microsoft continue through 2030, independent of OpenAI’s technology progress, at the same percentage but subject to a total cap; Microsoft continues to participate directly in OpenAI’s growth as a major shareholder.”

MANUS ACQUISITION: China’s National Development and Reform Commission announced that in accordance with laws and regulations, it made a decision prohibiting foreign investment in the Manus project, requiring Meta Platforms (META) to withdraw the acquisition transaction. Meta said in a statement to Bloomberg that the deal complied with applicable laws and that it expected a resolution to China’s investigation.

SMARTPHONE PROCESSORS: Analyst Ming-Chi Kuo said via X, formerly Twitter, that according to his latest industry checks, OpenAI is working with MediaTek and Qualcomm to develop smartphone processors, with Luxshare as the exclusive system co-design and manufacturing partner. Mass production is expected in 2028, Kuo said, adding that MediaTek and Qualcomm are processor co-development partners and could benefit from long-term replacement demand.

FRAUD CLAIMS: U.S. District Judge Yvonne Gonzalez Rogers dismissed Elon Musk’s fraud claims related to his lawsuit accusing OpenAI and co-founder Sam Altman of betraying the company’s original mission, Reuters reports. The U.S. District Judge of California does plan to proceed to trial on Musk’s breach of trust and unjust enrichment claims. Musk wanted the fraud and constructive fraud claims to be dismissed in order to streamline the case and keep jurors focused.

GOVERNMENT MODELS: The official account for the Office of the Under Secretary of War for Research and Engineering stated in a post to X, “Today, the @DeptofWar is officially adding Google’s Gemini for Government 3.1 Pro and 3.0 Flash to the suite of models available on URL These upgrades significantly reduce hallucinations, improve output quality, and accelerate productivity, giving warfighters more time to focus on mission-critical tasks.”

MILITARY AI USE: More than 560 Google (GOOGL) employees signed a letter urging CEO Sundar Pichai to block the use of its AI in classified U.S. military operations, citing concerns about harmful applications, The Financial Times’ Stephen Morris reports. The letter argues AI should benefit humanity and warns against uses such as lethal autonomous weapons and mass surveillance. “The only way to guarantee that Google does not become associated with such harms is to reject any classified workloads,” the letter says. “Otherwise, such uses may occur without our knowledge or the power to stop them.”