Case 4:24-cv-04722-YGR Document 32-11 Filed 11/14/24 Page 1 of 6

EXHIBIT 10
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From: Elon Musk

To: Sam Teller
Subject: Re: MSFT hosting deal
Date: Wednesday, September 21, 2016 12:09:59 AM

Fine by me if they don't use this in active messaging. Would be worth way more than $50M
not to seem like Microsoft's marketing bitch.

On Sep 20, 2016, at 8:05 PM, Sam Teller < Redacted for PII > wrote:

Microsoft is now willing to do the agreement for a full $50m with “good faith
effort at OpenAI's sole discretion” and full mutual termination rights at any time.
No evangelizing. No strings attached. No looking like lame Microsoft marketing
pawns. Ok to move ahead?

Begin forwarded message:

From: Sam Altman < Redacted for PII >

Date: September 16, 2016 at 6:45:45 PM PDT
To: Elon Musk < Redacted for PII >
Cc: Sam Teller < Redacted for PII >
Subject: Re: MSFT hosting deal

ok will see how much $ I can get in that direction.

On Friday, September 16, 2016, Elon Musk < Redacted for PII >
wrote:
We should just do this low key. No certainty either way. No
contract.

On Sep 16, 2016, at 3:33 PM, Sam Altman

< Redacted for PII > wrote:

I had the same reaction after reading that section and

they've already agreed to drop.

We had originally just wanted space cycles donated

but the team wanted more certainty that capacity will
be available. But I'll work with MSFT to make sure
there are no strings attached.

On Fri, Sep 16, 2016 at 3:10 PM, Elon Musk

< Redacted for PII > wrote:
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This actually made me feel nauseous. It sucks and is

exactly what I would expect from them.

Evaluation, Evangelization, and Usage of CNTK v2, Azure Batch and

HD-Insight: OpenAI will evaluate CNTK v2, Azure Batch, and HD-Insight
for their research, provide feedback on how Microsoft can improve
these products. OpenAI will work with Microsoft to evangelize these
products to their research and developer ecosystems, and evangelize
Microsoft Azure as their preferred public cloud provider. At their sole
discretion, and as it makes sense for their research, OpenAI will adopt
these products

Let’s just say that we are willing to have Microsoft

donate spare computing time to OpenAI and have that
be known, but we want do any contract or agree to
“evangelize”. They can turn us off at any time and we
can leave at any time.

From: PII - Sam Altman

[mailto: PII - Sam Altman ] On Behalf Of Sam
Altman
Sent: Friday, September 16, 2016 2:37 PM
To: Elon Musk < Redacted for PII >; Sam Teller
< Redacted for PII >
Subject: MSFT hosting deal

Here are the MSFT terms. $60MM of compute for $10MM, and input
from us on what they deploy in the cloud. LMK if you have any
feedback.

Sam

Microsoft and OpenAI: Accelerate the development of deep learning

on Azure and CNTK
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This non-binding term sheet (“Term Sheet”) between Microsoft

Corporation (“Microsoft”) and OpenAI (“OpenAI”) sets forth the
terms for a potential business relationship between the parties.
This Term Sheet is intended to form a basis of discussion and
does not state all matters upon which agreement must be
reached before executing a legally binding commercial
agreement (“Commercial Agreement”). The existence and terms
of this Term Sheet, and all discussions related thereto or to a
Commercial Agreement, are Confidential Information as defined
and governed bytheNon-DisclosureAgreementbe
tweenthepartiesdated17March,2016(“NDA”).
Exceptforthebindingnature of the foregoing confidentiality
obligations, this Term Sheet is non-binding.

OpenAI is focused on deep learning in such a way as

to benefit humanity. Microsoft and OpenAI desire to
partner to enable the acceleration of deep learning
Deal Purpose on Microsoft Azure. Towards this goal, Microsoft will
provide OpenAI with Azure compute capabilities at a
favorable price that would enable OpenAI to
continue their mission effectively.
Microsoft

· · Accelerate deep learning

environment on Azure

· · Attract a net new audience of next

generation developers

· · Joint PR and evangelism of deep

learning on Azure
Deal Business
Goal OpenAI

· · Deeply discounted GPU compute

offering over the deal term (3 years) for
use in their non-

profit research: $60m of Compute for

$10m

· · Joint PR and evangelism of OpenAI

on Azure
Parties
Microsoft OpenAI
(Legal entities)
Proposed Deal
September 19, 2016
Execution Date
Proposed Deal
Commencement Same as deal execution date
Date
Legal Authoring Microsoft holds the pen.
Deal Term 3 years
Case 4:24-cv-04722-YGR Document 32-11 Filed 11/14/24 Page 5 of 6

· Compute: Microsoft will provide OpenAI GPU core

hours of compute at the agreed upon price for
OpenAI’s workloads to run in Azure.

o Geographic Location: Geographic location

decisions will be at Microsoft discretion depending
on capacity and availability. Microsoft will also be
responsible for sharing the deployment strategy and
Engineering timelines with OpenAI.
Terms
o SLA: For all Virtual Machines that have two or
more instances deployed in the same availability set,
Microsoft guarantee OpenAI will have virtual
machine connectivity to at least one instance at least
99.95% of the time. Microsoft will be held
accountable to the SLA’s provided on
https://azure.microsoft.com/en-
us/support/legal/sla/virtual- machines/v1 2/

· · Evaluation, Evangelization, and Usage of

CNTK v2, Azure Batch and HD-Insight: OpenAI
will evaluate CNTK v2, Azure Batch, and HD-
Insight for their research, provide feedback on
how Microsoft can improve these products.
OpenAI will work with Microsoft to evangelize
these products to their research and developer
ecosystems, and evangelize Microsoft Azure as
their preferred public cloud provider. At their
sole discretion, and as it makes sense for their
research, OpenAI will adopt these products

· · Ramp: Microsoft and OpenAI will work

together for creating a ramp plan that balances
capacity per clusters. The initial timeline for
ramp is a minimum of 30 days that will be
augmented by Microsoft’s capacity expansion
plans in the coming months.

· · Capacity: OpenAI will be given an

allocation of capacity in the preview cluster
(located in US South Central) for short term
requirements and Microsoft will provide quota
access to the subsequent K80 GPU clusters that
go live in the 4th quarter of 2016 with the
intention of more capacity in Q1 2017 (calendar
year).
· Financial Terms: Microsoft will offer $60m worth of List
Compute (including GPU) at a deep discount which results
in a price of $10m to be paid by OpenAI over the course of
Financial
the deal. In the event OpenAI consumes less than $10m
Terms
worth of Azure compute, OpenAI will be responsible for
Case 4:24-cv-04722-YGR Document 32-11 Filed 11/14/24 Page 6 of 6

paying the balance between the used amount and $10m at

the end of the deal term to Microsoft.
Microsoft and OpenAI commit to jointly evangelizing deep
learning capabilities on Azure as agreed upon by both
parties.

o Ignite: Announce the partnership at Microsoft’s Ignite

event with executives (Sam
Marketing
& PR Altman from OpenAI and Satya Nadella from Microsoft)
Terms from both parties

inaugurating the collaboration

o PR: Microsoft and OpenAI will work together to issue a
joint press release about the

partnership including any materials such as blog posts and

videos.