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Microsoft Considers Legal Action Over Amazon-OpenAI Cloud Deal

  • 5 hours ago
  • 2 min read

Microsoft is considering legal action against its partner OpenAI and Amazon regarding a USD 50 billion deal. This action stems from concerns the agreement could violate Microsoft’s exclusive cloud arrangement with OpenAI, the creator of ChatGPT.


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Credit: UNSPLASH

Amazon and OpenAI previously signed multiple agreements. One such agreement designates Amazon Web Services as the exclusive third-party cloud provider for Frontier, OpenAI’s enterprise platform for developing and operating artificial intelligence agents.


The core of the dispute involves whether OpenAI can provide Frontier through Amazon Web Services without breaching its partnership with Microsoft. This partnership mandates that OpenAI’s models be accessible via Microsoft’s Azure cloud platform, according to sources.


OpenAI and Microsoft recently issued a joint statement, asserting, "Azure remains the exclusive cloud provider of stateless OpenAI APIs." A Microsoft spokesperson clarified this refers to software interfaces for accessing OpenAI’s models.


The spokesperson added, "We are confident that OpenAI understands and respects the importance of living up to this legal obligation."


The Financial Times reported that Microsoft executives believe this approach is not feasible and would violate the spirit, if not the letter, of their agreement. The organisations are currently in discussions to resolve the dispute before Frontier’s launch, aiming to avoid litigation.


"We know our contract," a person familiar with Microsoft’s stance told the newspaper. This source added, "We will sue them if they breach it. If Amazon and OpenAI want to take a bet on the creativity of their contractual lawyers, I would back us, not them."


Microsoft was among OpenAI’s initial investors, injecting USD 1 billion in 2019 and a further USD 10 billion at the beginning of 2023. In Sept., the two entities signed a non-binding agreement under revised relationship terms, which enabled OpenAI to pursue deals with SoftBank, Nvidia, and Amazon.

  • Microsoft is considering legal action against OpenAI and Amazon.

  • The dispute involves a USD 50 billion deal for OpenAI’s Frontier platform on Amazon Web Services.

  • Microsoft claims the deal could violate its exclusive cloud agreement with OpenAI.


Source: REUTERS

 
 
 

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