“MS·OpenAI Partnership May End Within a Few Years”…Amazon Is ‘Thriving’

UK Weekly Magazine The Economist Forecast
Significant Changes Coming to the Cloud Market
Where US Big Tech 3 Companies Are Competing Fiercely

As the three major US big tech companies compete fiercely in the global cloud market, there is an analysis that Microsoft's exclusive contract with OpenAI models could end within a few years.

On the 28th (local time), the British current affairs weekly The Economist reported that "some OpenAI board members and investors believe that Microsoft's dominance over OpenAI should be reduced," discussing the possibility of ending the partnership between Microsoft and OpenAI. Microsoft formed a partnership with OpenAI, then a startup, in 2019 and invested $13 billion by last year. In return, Microsoft obtained exclusive rights to run OpenAI models on its cloud platform Azure.

Wall Street analysts believe that Azure, backed by OpenAI, was able to eat into the growth rate of the industry-leading cloud platform Amazon Web Services (AWS). Investment bank Jefferies forecasted that Azure's revenue in Q3 this year (July to September) would increase by 30% year-on-year, while AWS would grow by only 19%. According to Synergy Research Group, as of the first quarter of this year, AWS holds 31% of the global cloud market, followed by Azure and Google Cloud with 25% and 11%, respectively.

There is a growing sense that Microsoft's dominance over OpenAI will not last forever. The Economist reported that OpenAI is restructuring its corporate form from a nonprofit to a for-profit entity and is renegotiating the terms of its relationship with Microsoft.

The Economist also pointed out that a partnership sunset clause is approaching. The outlet stated, "OpenAI is known to have the right to terminate its commercial relationship with Microsoft once its models reach artificial general intelligence (AGI)," adding that "AI enthusiasts believe this will happen within a few years." Microsoft's latest annual report this year explicitly listed OpenAI as a 'competitor' alongside big tech companies like Apple and Amazon, indicating the increasingly complex relationship between the two companies.

The risk posed by antitrust investigations from major regulatory authorities also supports arguments for OpenAI's independence. Currently, the US Federal Trade Commission (FTC) and the UK Competition and Markets Authority (CMA) are investigating the relationship between Microsoft and OpenAI.

If the partnership between Microsoft and OpenAI ends, AWS is expected to rejoice, the outlet predicted. This is because AWS does not operate large-scale software businesses that can demonstrate AI capabilities and, unlike other cloud platforms, does not possess any significant large language models (LLMs). Matt Garman, AWS President, reportedly expressed a desire to "run OpenAI on AWS," the outlet added. Some senior OpenAI officials are also said to be watching closely, stating that "if OpenAI gains access to AWS, its revenue could increase to $3.5 billion this year."

Microsoft may resist sharing OpenAI models with AWS, but since Microsoft holds a 49% stake in OpenAI, broad access to the cloud market by OpenAI could ultimately benefit Microsoft in the long term, analysts suggest. Goldman Sachs also analyzed that "the long-term trend in the cloud market is moving away from exclusivity toward open relationships," adding that "as companies increasingly use two or more cloud services, using multiple AI models could be advantageous."

This content was produced with the assistance of AI translation services.