Microsoft is contemplating legal action against OpenAI and Amazon over their $50 billion cloud deal, citing a breach of their exclusive cloud agreement. The deal, which gives Amazon exclusivity for Amazon Web Services as the cloud provider for OpenAI's enterprise platform, Frontier, is seen as a threat to Microsoft's Azure cloud dominance.
The move is the latest development in a long-standing feud between Microsoft and OpenAI, with Microsoft investing over $13 billion in the company and holding a 27% stake in its for-profit arm. The two companies have a history of tension, with Microsoft CEO Satya Nadella going to war to get OpenAI's Sam Altman back at the helm after he was fired by the OpenAI board in 2023.
Meanwhile, Microsoft is also reorganizing its Copilot division, with a new executive taking the reins to boost adoption and revenue. The company has invested heavily in AI, but its Copilot product has struggled to gain traction, with only 8% of users preferring it over other AI tools like ChatGPT and Gemini.
