Sam Altman and Satya Nadella, both gamechangers in the world of AI, came together for a podcast with investor Brad Gerstner, and the discussion did not focus on hype; instead, the focus of this fireside chat centered on a unique topic: distribution.
When OpenAI and Microsoft announced their alliance, the move was greeted positively, and MSFT stock popped roughly 4% on the news, not a bad price movement considering how mature MSFT is as a tech enterprise. However, what analysts and investors really wanted to know was how MSFT’s business would be affected by the partnership with OpenAI, and thanks to the BG2 podcast, we now have an idea: the most important OpenAI workloads will flow through Azure.
When discussing the world of the cloud, the money is where the cloud flow is heading, which is where the MSFT and OpenAI alliance will become a key area to watch moving forward.
OpenAI’s “stateless API” calls, which are the high-frequency requests that power assistants, agents, and AI features built into other programs, will run on Azure until 2030, unless an expert panel says AGI is ready sooner.
That routing choice doesn’t just raise Azure usage; it also raises storage, databases, security, orchestration, and monitoring. Microsoft gets more tokens and software the more those calls come in; that’s the flywheel’s main part.
All of this means that the OpenAI and MSFT deal completely rewires unit economics for Microsoft’s higher-margin software stack, making it more profitable. It is easier to sell and grow Microsoft 365 Copilot, GitHub Copilot, and the company’s security products if the underlying API is in Azure, leading to stronger margins.
Microsoft OpenAI deal AGI trigger explained and impact on MSFT stock
One element baked into the MSFT-OpenAI agreement is a wildcard: if an expert panel validates AGI, the monopoly on stateless APIs and the income sharing will terminate. What does that mean for Microsoft? It won’t change Microsoft’s AI position, but it will affect how quickly Azure’s OpenAI-driven growth happens and how visible the high-margin Copilot layers are.
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In the base situation, there won’t be an AGI call for a while. The main OpenAI surface keeps pointing to Azure, and customers keep building where the APIs are. Microsoft gets both the infrastructure utilization and the better software mix on top.
The most important margin lever is Copilot, which works with Microsoft 365, GitHub, and Security.
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Microsoft will still be in the lead for a while, even if an earlier AGI decision shortens the deal. Companies that put up data pipelines, governance, and monitoring on Azure definitely won’t transition to a different platform very quickly.
Being in the office, developer habits, and tools for compliance buy time. The concern isn’t that sales will suddenly drop. If distribution opens up sooner than planned, it will take longer to earn more shares from OpenAI traffic.
Investors should make a model of a steady course with exclusivity still in place, as well as a scenario where exclusivity ends early. Then, they should look at how much of the monetization moves to Microsoft’s application layer, which is less likely to be damaged by the changeover.
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Another key element that the podcast discussion focused on was H100 shipments, a market fixation if there ever is one. Instead, Nadella and Altman feel that the focus needs to be on something else entirely: power and ready data center shells.
When capacity is limited by megawatts and buildings, not just GPUs, Azure’s booked demand lasts longer, and prices stay stable for a longer period, which helps the operator with the strongest balance sheet, the biggest build footprint, and the most reasons for customers to wait in line.
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Microsoft is going with a “fungible fleet” strategy that lets them switch between pre-training, fine-tuning, and inference on different hardware and in different regions, lowering the risk of having too much inventory and keeps usage high. Azure can prioritize its most important workloads and keep its mix as long as power and real estate are the main problems.
The OpenAI stateless API traffic is near the front of that line, which keeps the flow of data into storage, databases, and Copilot going.
What to watch next
- Any formal description of the AGI verification process and who sits on the panel.
- New disclosures about the revenue share term and how Microsoft books it.
- Evidence of OpenAI flagship traffic landing outside Azure.
- Azure AI workload growth and Copilot adoption trends in customer case studies.
- Power availability and new data center shells since both leaders flagged capacity as the limiter.
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