Call it aAIAIAIAILLMAWS, AWSAIAWS. AILLmAIAWS, AIAIAWSAIAIAI AIAIAILLMAIAI). AIAIAI AIAIAWSAWSAIAWSAIAI LLMAIAWSAIAIAIAIYour browser does not support the element. spectacular modern-day version of Renaissance patronage. Since 2019 has provided more than $13bn in cash and computing capacity to , a once-penniless startup that is now at the forefront of generative artificial intelligence () and, as of its most recent fundraising round, worth $157bn. In exchange, Microsoft has gained the exclusive right to run Open’s models on Azure, its .So far it has been a wildly successful partnership. Funding from Microsoft has helped Open build bigger and better large language models (s). That technology, in turn, has been incorporated into Microsoft’s various software products. The ties between the two have allowed Azure to chip away at the lead of Amazon’s cloud-computing division, notes Brent Thill of Jefferies, an investment bank (see chart). Azure’s revenue grew 33%, year on year, in the quarter from July to September, exceeding expectations (though it projected growth would slow in the current quarter). Analysts reckon that ’s revenues grew by 19% for the same period (Amazon was due to report after went to press).Yet like Michelangelo with the Medicis, Open sometimes chafes at the ties to its wealthy benefactor. Some of its board members and other investors have told they believe that Microsoft should loosen its grip. They have their eyes on the half of the cloud-computing market still controlled by Gaining access to that would increase Open’s already dominant position in the provision of s, lifting revenues that are expected to be upwards of $3.5bn this year.Microsoft declines to discuss details of its contract with Open. Given Azure’s long-standing rivalry with it is a fair bet the Redmond-based company is loth to lend its Seattle-based neighbour a helping hand. For Microsoft, however, ending its exclusive patronage of Open may not be as crazy as it sounds.Those championing more commercial freedom for Open argue that although Microsoft might resent sharing models with , in the long run its equity stake in Open would mean it would benefit from the model-maker gaining broader market access. Antitrust concerns also bolster the case for giving Open greater independence. America’s Federal Trade Commission and Britain’s Competition and Markets Authority have opened inquiries into the relationship between Microsoft and Open.Mr Thill of Jefferies says more openness would be in Microsoft’s long-term interest. “It’s like a kid going to college,” he says. “It’s painful. But the right thing is to let [Open] out into the world.”Microsoft has already begun reducing its dependence on Open. Satya Nadella, the tech giant’s boss, was reportedly shocked when Sam Altman, his counterpart at Open, was briefly ousted last November, before being quickly reinstated. Since then Microsoft has been hedging its bets, including by adding s from , a French firm, and others to its line-up and hiring nearly all the staff of Inflection, an Open rival, including its boss, Mustafa Suleyman (who sits on the board of ’s parent companyOn October 29th Microsoft’s GitHub, which supports software developers, said it would offer more choice to its clients, allowing them to use other models.Microsoft and Open are in the process of renegotiating the terms of their relationship as the model-maker changes its corporate structure from a non-profit to a profit-making entity. There may also be a looming sunset clause. Open is believed to have the right to dissolve its commercial ties with Microsoft if its models reach a level of superhuman capability called artificial general intelligence. What that means in practice is subjective, but some enthusiasts argue it could be only a few years away.Amazon, for its part, would be delighted to gain access to Open’s models. “I would love for Open to run on ,” says Matt Garman, ’s newish boss. Pradeep Sanyal, an consultant and former executive, says that even though Amazon’s cloud business is still the biggest, it is “third in mindshare” when it comes to generative , behind Azure and Google Cloud Platform (whose revenues grew by 35%, year on year, in the latest quarter). Amazon has neither a big software business where it can demonstrate its capabilities nor an whizzy enough to compete with those of Open or Google. offers customers a wide variety of models, ranging from those of Anthropic (in which Amazon is a big investor) to Meta’s Llama family of open models (which Mr Garman says are very popular among AI startups). Adding those of Open would no doubt attract more customers. But Mr Garman does not believe any model will dominate completely; Open, Anthropic and others are currently “leap-frogging each other”, he notes. On October 22nd Anthropic launched an experimental version of its Claude 3.5 Sonnet model that can use a computer the way a human does, including virtually operating the keyboard and mouse.Amazon’s more open approach may yet prevail. Eric Sheridan of Goldman Sachs, a bank, thinks it will take years, not months, to determine which of the different cloud-service providers emerges as the definitive winner in generative . He points out, though, that the long-running trend in cloud computing is away from exclusivity towards more open relationships. Like the Medicis, Microsoft may well go down in history for having spotted creative genius early on. But its hold over Open may not last forever.
