OpenAI cuts a deal with Microsoft to finally sell on AWS

OpenAI just pulled off something that would have seemed impossible a year ago: it convinced Microsoft to let it sell products on Amazon Web Services.

This is a big deal. For years, OpenAI was locked into Microsoft’s Azure as its exclusive cloud provider. That arrangement made sense when Microsoft was pouring billions into the company and needed to justify its investment. But it also meant OpenAI couldn’t touch the largest cloud market in the world — AWS — without violating its contract. That’s a lot of potential revenue left on the table.

Now, according to the renegotiated terms, OpenAI gets to offer its models through AWS. In exchange, Microsoft gets a bigger cut of the revenue from those sales. Nobody’s saying exactly how much, but given that Amazon just committed $50 billion to its own AI infrastructure and OpenAI is the hottest name in town, it’s safe to assume the numbers are eye-watering.

What’s interesting here is that this deal effectively ends the legal risk Microsoft was facing. If OpenAI had pushed ahead with an AWS partnership without Microsoft’s blessing, you can bet lawyers would have been sharpening their pencils. Instead, both sides found a way to make it work. Microsoft keeps its exclusive access to OpenAI’s underlying technology for its own products — think Copilot and Azure OpenAI Service — while OpenAI gets to chase revenue on AWS without triggering a lawsuit.

This is higher than I expected, frankly. Microsoft has been aggressive about locking down its AI investments. Giving up exclusivity on the cloud side suggests they’re either very confident in their own AI stack or they realized that blocking OpenAI from AWS was only hurting their own returns. Probably both.

For Amazon, this is a win too. AWS has been scrambling to catch up in the generative AI race, and having direct access to OpenAI’s models makes its platform more attractive to enterprises that want flexibility — run some workloads on Anthropic, some on OpenAI, some on their own fine-tuned models. It’s the multi-cloud approach everyone claims they want.

The timing is interesting. Amazon just announced its $50 billion infrastructure spend, and now OpenAI gets to be part of that ecosystem. It’s almost like the three cloud giants — Microsoft, Amazon, and Google — are all trying to hedge their bets by investing in every major AI lab simultaneously. Microsoft has OpenAI, Amazon has Anthropic, Google has DeepMind. But now they’re all playing in each other’s sandboxes.

I don’t think this means the end of the Microsoft-OpenAI relationship. Microsoft still holds a significant stake, still gets first dibs on new models for its own products, and still benefits from OpenAI’s growth. But it does signal that OpenAI is serious about becoming a platform company, not just a research lab with a single distribution channel.

The real question is whether this opens the door for other cloud providers. Google Cloud would love to host OpenAI models. So would smaller players. If Microsoft was willing to give up exclusivity with AWS, what’s stopping the next deal?

Probably nothing. And that’s good for everyone except maybe the lawyers who were hoping for a nice, long courtroom drama.