Microsoft Considers Legal Action Over $50 Billion Amazon-OpenAI Cloud Deal

An anonymous reader quotes a report from Reuters: Microsoft is considering legal action against its partner OpenAI and Amazon over a $50 billion deal that could violate its exclusive cloud agreement with the ChatGPT maker, the Financial Times reported on Wednesday. Last month, Amazon and OpenAI signed several agreements, including one that makes Amazon Web Services the exclusive third-party cloud provider for Frontier, OpenAI's enterprise platform for building and running AI agents. The dispute centers on whether OpenAI can offer Frontier via AWS without violating the Microsoft partnership, which requires the startup's models to be accessed through the Windows maker's Azure cloud platform, the FT report said, citing sources.

OpenAI and Microsoft recently stated together that "Azure remains the exclusive cloud provider of stateless OpenAI APIs," a Microsoft spokesperson said in an emailed statement, referring to software interfaces used to access OpenAI's models. "We are confident that OpenAI understands and respects the importance of living up to this legal obligation," the spokesperson added. FT said Microsoft executives believed the approach was not feasible and would violate the spirit, if not the letter, of their agreement, and added that the companies were in talks to resolve the dispute without litigation ahead of Frontier's launch. "We know our contract," a person familiar with Microsoft's position told the newspaper. "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."

Sam Altman

[Bill, Shooter of Bul]

What!!! Sam Altman not following through with a promise!?! A legal one at that ?!?! Just screwing people over when ever it suits him?!? Crazy times when you can't trust the guy no one trusts at all and was fired over his blatant lies.

Re:

[Deal In One]

It's Amazon, MS and OpenAI fighting it out. Everyone has deep pockets.

Am sure the lawyers are in heaven.

Re:

[evanh]

$50 billion each!

Re:

[karmawarrior]

Hi, Sam Altman here.

What Microsoft is forgetting is that by me bankrupting them by not following through on their so-called contract, which my lawyers tell me was never valid because we actually got our AI to sign it, I'm actually helping them transition to a utopia where robots will run everything and humans won't need to do anything ever again. All of Microsoft's employees can instead choose to live much more pleasant, shorter, lives, with our new dying-with-dignity machines modeled on the that one in Sol

Exclusive contract

[sentiblue]

Why an exclusive contract? They should have gone with a contract that doesn't involved "exclusivity" in it. That way in the future they get to choose more options. I'm quite sure the exclusive part gives OpenAI a great deal, but if they turn around and ask AWS/GCP to put in a bid, they could get it too. It doesn't have to be Azure alone. But on top of that, OpenAI mostly runs things in their own data centers, locking something down into a single cloud provider is probably not a good move.

Re:

[Vlad_the_Inhaler]

locking something down into a single cloud provider is probably not a good move.

Well, looking at an earlier story from today [slashdot.org], they have good reason to look for alternatives.

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[Local ID10T]

Because Microsoft insisted as a condition of their investment.

Microsoft was the first big investor, back before anyone else was willing to take a chance with OpenAI. Microsoft has already relaxed a lot of the conditions of their early agreements in order to allow OpenAI to grow and each time they have gotten a new concession in return. Expect this to be another similar arrangement: "Give us X and we will let you out of your agreement to not do Y..."

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[sentiblue]

You're probably right... I totally forgot that MSFT invested the first $1B into OpenAI.

die openai die!!!!!!

[Anonymous Coward]

ugh i cant wait for OpenAI to literally destroy themselves legally from within.

Re:

[HiThere]

It sounds as if MS is aiming to turn OpenAI into a wholly owned subsidiary. They're both so horrible that I'm not sure whether that would be good or bad.

The pool is drying up

[greytree]

The investment money pool is drying up and the fat fish stuck in it are starting to eat each other.

The end is nigh, thank goodness.

Well, Satya ...

[jenningsthecat]

... You COULD have simply made sure that Microsoft's cloud offering wasn't a piece of shit [slashdot.org].

If your cloud service wasn't seriously defective, then perhaps OpenAI wouldn't be defecting in order to avoid the defecation which Azure represents.

Boo Hoo!

[jvkjvk]

>Microsoft executives believed the approach was not feasible and would violate the spirit, if not the letter, of their agreement

Yeah, you can't get much money for violating what *you* consider the "spirit" of the agreement. It's the LETTTER of the agreement that counts. Lol.

Borg gets out Borged /s

[Mirnotoriety]

> Microsoft is considering legal action against its partner OpenAI and Amazon over a $50 billion deal that could violate its exclusive cloud agreement with the ChatGPT maker ..

Yea, that's what we do. Partnering with companies while maneuvering to steal their lunch. We managed to do it to IBM - TWICE :|