Google wants to break Microsoft’s monopoly on OpenAI, and has an ace up its sleeve

Google is not happy with Microsoft’s control over OpenAI, and has taken action: it has asked US antitrust authorities to investigate its exclusivity agreement in cloud services, according to publications The Information.

Why is it important. The current agreement requires any company that wants to use OpenAI technology to do so through Microsoft servers. This translates into potential barriers to entry and extra costs.

In figures:

• Microsoft generates $1 billion a year reselling OpenAI models.
• It also receives 20% of OpenAI’s revenue.
• OpenAI is billing more than $3 billion in 2024 by selling its models to other companies, according to Ars Technica quoting The Information.

The context. Google’s petition comes amid a larger FTC investigation into Microsoft’s business practices in the marketplace. cloud.

The timing is especially delicate as OpenAI increasingly dominates the field of generative AI.

Between the lines. Google’s move can be understood as more than just a request for justice: it is also a strategic response to its competitors.

Microsoft gained a dominant position thanks to the lightning-fast OpenAI deal, while Google had to stay relevant in generative AI with rapid releases in response to the arrival of ChatGPT. Google has been focused on AI as a strategy for many years, but Gemini (formerly Bard) only arrived after ChatGPT, not before.

The current situation. Companies like Intuit pay a lot of extra money per month to be able to access OpenAI models through Azure, Microsoft’s cloud.

Google, and also Amazon, argue that they should be able to host these models on their own infrastructures.

And now what. Microsoft could defend itself by pointing out that there is already competition from AI models from Google and Amazon. However, the sales of these systems are far behind those that OpenAI achieves with its own.

That could strengthen the antitrust argument… and cement Google’s revenge.

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Featured image | Greg Bulla in Unsplash