Key Points
On April 27, 2023, Microsoft (NASDAQ: MSFT) and OpenAI announced a reshaping of their long-standing partnership, previously valued at around $13 billion. This restructured deal allows OpenAI to distribute its models across various cloud platforms, including Amazon Web Services (AWS).
AWS, holding a 28% market share compared to Azure’s 21% as of the end of 2022, is now positioned to attract customers who prefer OpenAI’s models. This shift comes shortly after Amazon (NASDAQ: AMZN) announced a $50 billion investment in OpenAI, which includes hosting rights for OpenAI’s Frontier models on AWS.
In Q1, AWS contributed approximately 20% to Amazon’s revenue but accounted for 59% of its operating income. With a current backlog valued at $364 billion, AWS is anticipated to drive significant growth by incorporating OpenAI technologies.
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