Asa Fitch's Heard on the Street column lays out why Microsoft and OpenAI's newly redrawn partnership — their second amendment in six months — signals an eventual split, even if it's a slow one.
What changed Monday
Microsoft and OpenAI redrew their partnership: OpenAI is now free to sell AI tools outside Microsoft's Azure cloud; the revenue-share through 2030 is capped. Microsoft has begun integrating Anthropic's models — which excel in coding and corporate tasks — into its AI tools. Microsoft is also developing its own AI models rather than leaning solely on OpenAI.
Why each side wants out
(1) For Microsoft: being closely tied to OpenAI makes less sense when competing models from Anthropic and others are equal or better in many corporate contexts. Microsoft's diversification is now a feature, not a bug.
(2) For OpenAI: exclusivity is a financial constraint heading into a hoped-for IPO this year. CFO Friar has flagged compute-cost concerns; the new freedom to sell AI tools across clouds is critical for revenue acceleration.
Today's news that OpenAI is missing its own user and revenue targets adds urgency. The two companies will likely remain entangled through 2030, but their commercial paths are diverging now.
AI infrastructure trade rolls over — AI builders hold
This piece + today's OpenAI miss is the cleanest signal yet that the "circular AI-infra revenue" thesis (where OpenAI's computing spend recycles into Oracle/CoreWeave/SoftBank earnings) is now exposed as a financing-dependent loop. We TRIM ORCL, CRWV, AMD. We HOLD NVDA, AVGO, GOOGL, MSFT — these are owners and beneficiaries, not OpenAI counterparties. Microsoft notably benefits from this split (less single-point-of-failure exposure) so MSFT stays as core. Watch tonight's Mag-7 prints; if Microsoft Azure capex slows AND OpenAI dependency is reaffirmed, that's the worst-case combo.
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