Google urges FTC to overturn Microsoft's exclusive OpenAI cloud deal
At a Glance
- Google has asked the FTC to investigate Microsoft's exclusive cloud hosting agreement with OpenAI, which prevents other providers from hosting OpenAI's AI models.
- Cloud providers argue that the exclusive agreement imposes significant additional costs on customers not already using Microsoft Azure, requiring them to pay for data transfers between different platforms and to train staff.
- The FTC is investigating whether the agreement impedes fair competition in artificial intelligence, while OpenAI itself may have an interest in offering its technology through other providers, as it is allegedly dissatisfied with Microsoft's server capacity.
Google has asked the Federal Trade Commission (FTC) to examine the exclusive cloud hosting agreement between Microsoft and OpenAI, according to The Information.
The agreement, based on Microsoft's $13 billion investment in OpenAI, prevents other cloud providers from hosting OpenAI's AI models.
The complaint is part of a broader FTC investigation into Microsoft's business practices, which also looks at software licensing and cybersecurity operations.
Cloud providers point to added customer costs
Sources familiar with the matter say cloud providers argue the exclusive deal creates significant extra expenses for customers. Companies not already using Microsoft Azure must pay additional costs for data transfers between different cloud platforms and train staff to use Azure.
The FTC is now evaluating whether the exclusive agreement limits fair competition in artificial intelligence. The agency is conducting discussions with Microsoft's competitors.
According to The Information, OpenAI itself might be interested in offering its technology through other cloud providers. The company is reportedly dissatisfied with the server capacity Microsoft provides as it tries to maintain its lead in the AI market.
Competitor Anthropic offers its models on multiple providers' platforms, including Amazon's AWS and Google Cloud. However, Amazon is trying to secure a stronger contractual commitment from the AI developer: A condition of Amazon's recent billion-dollar investment requires Anthropic to increase its use of Amazon's AI chips.
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