It’s a move that seemed likely ever since Amazon announced its $50 billion deal with OpenAI earlier this year, which was originally framed as a deal to make AWS a third-party provider of OpenAI Frontier, together with some collaborative work on custom models for Alexa. Microsoft wasn’t happy about OpenAI cutting a deal with its main rival, and it was weighing legal action ahead of this renegotiation.

Amazon and OpenAI clearly wanted a closer partnership, especially as Amazon is playing catch-up in the AI market and trying to push agents to businesses through its Bedrock service. OpenAI told its employees earlier this month that its deal with Microsoft “has also limited our ability to meet enterprises where they are — for many that’s Bedrock.” Ouch.

As much as Microsoft will hate seeing OpenAI models being available to Amazon, it now stands to benefit from OpenAI cozying up to its rival. Sources tell me that as part of the amended agreement, Microsoft will continue to receive 20 percent of the revenue OpenAI earns for ChatGPT and the AI startup’s API platform. This also includes a cut of any revenue OpenAI earns from putting its products and services on rival cloud platforms like AWS. There’s a revenue cap, but this seems mutually beneficial for both Microsoft and OpenAI even if the Amazon deal originally angered Microsoft.

Microsoft will remain “OpenAI’s primary cloud partner” and ship OpenAI’s latest products first on Azure, but the lack of exclusivity now means OpenAI’s new models can ship minutes later to rival cloud platforms. I wouldn’t be surprised to see OpenAI’s models also appear on Google’s Gemini Enterprise Agent Platform service in the future.