Microsoft considers legal action over $50 billion Amazon-OpenAI cloud deal, FT reports

March 18 (Reuters) - Microsoft MSFT.O is considering legal action against its partner OpenAI and Amazon AMZN.O over a $50 billion deal that could violate its exclusive cloud agreement with the ChatGPT maker, the Financial Times reported on Wednesday.

Last month, Amazon and OpenAI signed several agreements, including one that makes Amazon Web Services the exclusive third-party cloud provider for Frontier, OpenAI's enterprise platform for building and running AI agents.

The dispute centers on whether OpenAI can offer Frontier via AWS without violating the Microsoft partnership, which requires the startup's models to be accessed through the Windows maker's Azure cloud platform, the FT report said, citing sources.

MICROSOFT: CONFIDENT OPENAI UNDERSTANDS LEGAL OBLIGATION

OpenAI and Microsoft recently stated together that "Azure remains the exclusive cloud provider of stateless OpenAI APIs," a Microsoft spokesperson said in an emailed statement, referring to software interfaces used to access OpenAI’s models. "We are confident that OpenAI understands and respects the importance of living up to this legal obligation," the spokesperson added.

Amazon and OpenAI did not immediately respond to requests for comment.

FT said Microsoft executives believed the approach was not feasible and would violate the spirit, if not the letter, of their agreement, and added that the companies were in talks to resolve the dispute without litigation ahead of Frontier's launch.

"We know our contract," a person familiar with Microsoft’s position told the newspaper. "We will sue them if they breach it. If Amazon and OpenAI want to take a bet on the creativity of their contractual lawyers, I would back us, not them."

Microsoft was one of OpenAI's earliest investors, injecting $1 billion in 2019 and $10 billion at the beginning of 2023. In September, the two signed a non-binding deal under new relationship terms, paving the way for OpenAI to sign deals with SoftBank 9434.T, Nvidia NVDA.O and Amazon.