OpenAI cuts a deal with Microsoft to sell on AWS—and it’s a win for both

OpenAI just pulled off something that would have been unthinkable a year ago: it got Microsoft to loosen its grip on the exclusive cloud deal that tied OpenAI’s products to Azure.

As of this week, OpenAI can sell its models and services on Amazon Web Services (AWS) without triggering Microsoft’s legal hammer. The original contract, signed back when OpenAI was still a scrappy startup, gave Microsoft exclusive rights to host OpenAI’s commercial APIs. That deal was worth around $50 billion when you factor in compute credits, revenue shares, and Microsoft’s equity stake.

But the landscape changed. OpenAI is now a powerhouse with its own revenue streams, and companies like Amazon are hungry to offer GPT-class models directly to their own cloud customers. The old exclusive clause was becoming a liability—for both sides.

Here’s what the new deal looks like: Microsoft drops its exclusivity claim on OpenAI’s commercial products (including GPT-4, GPT-4 Turbo, and whatever comes next). In return, Microsoft gets a bigger cut of any revenue OpenAI generates from AWS. I’ve heard the new revenue-share percentage is north of 20%, but neither party has confirmed exact numbers.

For Microsoft, this is pragmatic. They still own a massive chunk of OpenAI (reportedly 49% of the for-profit entity), and they’ll now collect a slice of every API call made through AWS. That’s recurring revenue they wouldn’t have seen if OpenAI had simply walked away or fought a legal battle. And let’s be honest—Microsoft’s Azure business is already swimming in AI workloads. They don’t need to hoard OpenAI to win cloud market share.

For OpenAI, this is about survival and growth. AWS is the largest public cloud by market share. Being locked out of that ecosystem meant every enterprise customer who wanted to use OpenAI models had to either use Azure or go through OpenAI’s own API. That’s a bottleneck. Now, companies running on AWS can spin up OpenAI models with a few clicks, just like they already do with Anthropic or Meta’s Llama.

This also takes the legal heat off both companies. There were whispers that Amazon might challenge the Microsoft-OpenAI exclusivity under antitrust law, especially given the FTC’s ongoing scrutiny of cloud market practices. This deal snuffs that fire before it starts.

The timing is interesting. This comes just weeks after OpenAI announced a $500 billion data center buildout with SoftBank and Oracle—a project that explicitly includes AWS as a partner. Clearly, Sam Altman and team are playing the long game. They want OpenAI to be infrastructure-agnostic, not married to any one cloud provider.

I’ll be watching how this affects pricing. If OpenAI models become available on AWS at competitive rates, it could pressure Anthropic and Google to sweeten their own cloud deals. And Microsoft? They’ll still offer OpenAI models on Azure with tight integration to Office 365 and GitHub Copilot. That’s their moat.

One thing is clear: the era of exclusive AI-cloud marriages is ending. OpenAI just proved that even the most locked-in contracts can be renegotiated when both sides see a bigger opportunity.