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Amazon is bringing OpenAI’s models and Codex to AWS after Microsoft’s shift away from exclusivity, giving cloud customers more ways to use AI tools.
Amazon just gained something it has long lacked in the AI cloud race: OpenAI.
The tech giant will, for the first time, resell OpenAI products on its cloud computing platform, announcing their availability a day after Microsoft terminated its exclusive commercial license with OpenAI. It is a major boon for the largest cloud provider, which has seen its lead in the cloud computing market eaten away over the past three years as customers shift workloads to Microsoft Azure.
The partnership comes a few weeks after OpenAI closed the largest funding round in history, receiving $122 billion and valuing the company at $852 billion. About $50 billion of that funding came from Amazon, $15 billion upfront and $35 billion once certain conditions are met, one of which may have been to terminate the exclusivity contract with Microsoft.
Another condition may be the integration of OpenAI’s GPT model into Alexa, with the two parties reportedly in discussions about this integration before the funding round closed.
In return, OpenAI said it would spend an additional $100 billion on AWS computing power, another circular investment in which the initial payments could be recouped in five years. OpenAI may have spent with Amazon regardless of the investment, however.
The exclusivity agreement forced AWS to quickly assemble a roster of others, such as Anthropic, AI21, and Stability AI, in 2023. Meta AI was added later on. But that wasn’t enough for some AWS customers, who shifted to Azure to access OpenAI’s models.
Amazon’s early investment in Anthropic seems to have paid dividends, as Anthropic announced that over 100,000 customers have accessed Claude through Amazon Bedrock.
The termination of Microsoft’s exclusive commercial license, established in 2022 when the software giant invested $10 billion in OpenAI, will hit Microsoft hard, even as both sides have been growing apart. OpenAI has courted investment from rivals, and Microsoft has both invested in rival AI models and added them to its cloud platform.
In 2022, GPT was the crown jewel of the AI world, and ChatGPT was the killer app. ChatGPT is still the most popular AI app in the world, with close to 1 billion users, but it has been playing catch-up to Anthropic in coding and other enterprise tasks, with some heavy users and investors seeing Claude as the more sophisticated and technically impressive AI model.
Even as OpenAI and Anthropic take potshots at each other, the cloud computing providers are more than willing to invest in both. Microsoft and Amazon have invested in both, while Google has invested in Anthropic and has an infrastructure relationship with OpenAI.
Microsoft is also under pressure to demonstrate that it is not just an infrastructure provider in the AI ecosystem. It has invested billions on the assumption that enterprise customers would use its AI tools and services, and has committed to launching leading-edge AI models by next year. This will be done without the assistance of OpenAI, as Microsoft attempts to build out its AI portfolio using in-house models.
Also read: Our ChatGPT cheat sheet explains OpenAI’s features, costs, enterprise uses, and competitors as cloud access expands.
David Curry is a tech journalist and analyst with over a decade of experience writing for established outlets. He holds a master’s degree in International Journalism from the University of Leeds and has covered the technology sector since the early 2010s. His work focuses on B2B technology, data journalism, mobile apps and app markets, artificial intelligence, digital platforms, and emerging technologies. He earned a BA from the University of Lincoln and an MA from the University of Leeds.
