Google Wants to Break Microsoft’s Monopoly on OpenAI. It Already Has an Ace up Its Sleeve

Google has targeted Microsoft’s control over OpenAI. According to The Information, it has requested that the Federal Trade Commission (FTC) investigate the exclusivity of its cloud services agreement.

Why it matters. The current agreement requires companies using OpenAI’s technology to do so via Microsoft’s Azure cloud platform. Critics argue this arrangement creates barriers to entry, limits competition, and drives up costs for businesses.

The numbers:

• Microsoft earns approximately $1 billion annually by reselling OpenAI’s models.
• It also takes a 20% cut of OpenAI’s revenue.
• OpenAI is expected to generate $3 billion in revenue from selling its models to other companies by 2024.

The context. Google’s complaint comes amid a broader FTC investigation into Microsoft’s practices in the cloud market. This inquiry coincides with OpenAI’s growing dominance in generative AI systems, an area increasingly critical for tech giants.

Between the lines. Google’s move may be about more than seeking fairness. It’s also a strategic counter to Microsoft’s rapid rise in AI models dominance.

Microsoft’s early partnership with OpenAI allowed it to seize a leading position, while Google has struggled to keep pace with its own generative AI systems efforts.

Despite years of AI models investment, Google’s Bard (now Gemini) was released only after ChatGPT captured the public’s attention. The exclusivity deal between Microsoft and OpenAI puts additional pressure on Google to respond.

The current situation. Companies like Intuit reportedly pay significant premiums to access OpenAI’s models through Azure.

Meanwhile, Google and Amazon argue they should be able to host these models on their respective cloud platforms, which would lower costs and foster competition.

What’s next? Microsoft may defend itself by pointing to the competitive AI landscape, where Google and Amazon both offer rival generative AI models. However, with OpenAI’s models currently dominating the market, this argument may bolster claims that Microsoft’s exclusivity creates unfair advantages.

If regulators take action, the case could disrupt Microsoft’s strategy and offer Google a chance to reclaim ground in the AI race.

Image | AS Photography

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