Microsoft had the deal of the century on its hands. A break of a year and a half was given to one of his rivals on a platter

With its early deal with OpenAI, Microsoft was leading the AI ​​race in 2023. A year later it froze its expansion. Now Oracle serves OpenAI models and competitors share what Nadella’s company rejected.

Why is it important. This isn’t just about lost data centers. Microsoft has assigned contracts with OpenAI valued at $420 billion to Oracle, equivalent to $150 billion in gross profit over five years. That would have increased its annual profitability by 18%.

This means that in addition to losing growth, Microsoft also financed the entry of a rival into the most profitable business of the decade, according to analysis by Semianalysis.

The facts. In 2023, Microsoft multiplied its investment in OpenAI tenfold to $10 billion and broke ground on the largest data centers ever built. Represented more than 60% of all infrastructure leases cloud among the greats.

In 2024 it stopped everything in its tracks. It canceled 3.5 gigawatts of planned capacity — enough to power 2.5 million homes — and projects in a dozen countries. Its share of contracts fell below 25%.

Between the lines. The company has used the argument of financial prudence: it did not want OpenAI to represent 50% of Azure’s revenue with lower margins than the traditional business. But the reality is simpler: he couldn’t keep up:

OpenAI demanded a speed that Microsoft couldn’t match.

Yes, but. The company has returned to the market with some urgency. The problem is that the options have been running out. Now rents capacity to neoclouds —specialized companies that build infrastructure—to resell it to third parties. It is a business with worse margins.

The company that refused to build now pays commissions for having miscalculated.

The money trail. Oracle is not the only winner. CoreWeave, Google, Amazon, Nscale and SB Energy have signed large contracts with OpenAI. In 2025, the story of OpenAI has been the story of its diversification away from Microsoft, although it is true that What seemed like a bad divorce ended in a separation of assets with forced smiles.

The world’s most valuable AI lab had to fragment its infrastructure across multiple vendors because its original partner couldn’t—or wouldn’t—scale.

• In applications, Microsoft’s historical dominance with GitHub Copilot is also eroding.
• There are startups that have built more integrated code editors and scaled beyond Copilot.
• Microsoft has been forced to add the models of its rival Anthropic on GitHub Copilotwith a brutal cost for their margins.

The company that had exclusive access to OpenAI now depends on its competitor to keep its code editor relevant.

And now what. Microsoft has until 2032 before its agreement with OpenAI expires.

• It has Copilot with 100 million users.
• You have Office 365, Azure, and a business ecosystem that no one else can match.
• But the “great pause” of 2024 will take years to heal.

The company has bet that the future of AI will be enterprise – with security and localization requirements – and not centralized in remote megacenters. You may be right. But 18 months of technology advantage is worth billions. And Microsoft just gave them away to its rivals.

In Xataka | OpenAI has to pay debts of $400 billion in 2026. Nobody has the slightest idea how it is going to pay them

Featured image | Simon Ray in Unsplash