Recent antitrust accusations leveled against Microsoft, stemming from its investment in OpenAI, are prompting IT leaders to re-evaluate their artificial intelligence (AI) contracts. Experts are advising enterprises to build adaptability into agreements ​to mitigate potential risks associated with fluctuating pricing and vendor motivations.

According to legal counsel, immediate action for‌ enterprise CIOs considering partnerships⁤ with either Microsoft or OpenAI should include incorporating provisions allowing for contract renegotiation. “If we are considering ‍working with ‌either of these entities, the only immediate action​ is to write in a provision that gives ​ [the enterprise] room to renegotiate to the extent⁢ that‌ this case reaches a judgment or‍ they reach a ‌settlement that may impact the contract,” stated an unnamed legal expert. They‍ added that​ such language might already be​ implicitly included in ⁢many contracts.

Douglas Brush,⁣ a‌ special master with the US federal ‌courts, ‌emphasized⁤ the ⁤need for a essential ⁣shift in how enterprise IT approaches AI contracts. He believes the current accusations necessitate⁢ a proactive response.

Brush advocates ⁢for‍ a strategy centered around short-term contracts with built-in re-opener clauses, transparent‌ pricing ⁣structures with safeguards, and ⁣diversification across multiple cloud providers. “The best approach⁤ is to use short contracts with re-openers,transparent pricing with safeguards,multiple cloud options,and an economics model that‍ prioritizes consumption,” Brush advised. “This allows [enterprises] to benefit from falling prices, protect themselves when they rise, and keep the business running regardless of any single vendor’s motives.”

He further suggests a shift in budgetary thinking, recommending that AI be treated​ as a commodity ‍input – a⁢ cost of goods sold (COGS) – rather than a traditional fixed software license ⁣operating expense (OPEX). “Budgeting needs to treat AI like a commodity input, not a​ fixed​ software license – [cost of goods sold] versus [operating expense]. … Quarterly repricing and automatic rebases to ‍current schedules are table stakes,” Brush concluded.