On April 27, Microsoft and OpenAI announced a restructured multibillion-dollar partnership. OpenAI is now free to sell its models through any cloud provider, including Amazon Web Services (AWS), ending Microsoft's exclusive license to OpenAI's models and Azure's status as OpenAI's sole cloud provider.
AWS is the world's largest cloud services platform, with a 28% market share compared to Azure's 21% as of the end of last year. Previously, companies that preferred OpenAI's models had to use Azure; now they can choose AWS instead. AWS also hosts OpenAI's Frontier models (advanced AI systems) as part of a separate $50 billion Amazon investment in OpenAI announced two months earlier.
In Q1, AWS accounted for around 20% of Amazon's revenue but brought in 59% of its operating income (profit from core operations). AWS revenue increased 28% year over year in Q1. AWS currently has a $364 billion backlog due to capacity constraints.
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