Technologies

OpenAI’s Strategic Shift from Microsoft to Amazon Intensifies

While OpenAI and Microsoft remain partners, the AI company has been rapidly pushing into Amazon’s world.

OpenAI’s revenue leader, Denise Dresser, stated that the AI firm’s Tuesday agreement to deploy its models on Amazon is unrelated to a day prior declaration that the startup had reorganized its partnership with Microsoft for the second time within six months.

“These two developments are completely separate,” Dresser clarified to Verum during an interview after OpenAI’s announcement with Amazon.

However, market analysts remain skeptical.

Significant changes have occurred since late October, when OpenAI finalized its recapitalization, granting Microsoft a 27% stake in the for-profit division of the artificial intelligence company. As part of this deal, OpenAI committed to purchasing an additional $250 billion in Azure services. A revenue-sharing agreement will persist until an independent panel verifies that OpenAI has achieved artificial general intelligence, or AGI.

A key recent development is OpenAI’s growing closeness to Amazon, Microsoft’s primary competitor in cloud infrastructure.

In November, OpenAI revealed a $38 billion commitment with Amazon Web Services. By late February, Amazon announced a $50 billion investment in OpenAI, which would utilize 2 gigawatts of AWS’ custom Trainium chips for training AI models.

Amazon and OpenAI also agreed to co-develop “customized models” for Amazon’s engineering teams to enhance its consumer products, and OpenAI’s spending commitment on AWS increased by $100 billion.

“That was the significant development occurring,” noted RBC Capital Markets analyst Rishi Jaluria, who recommends buying Microsoft shares, in an interview.

This week’s dual announcements mark the most evident sign yet of a dramatic shift in the decade-long relationship between Microsoft and OpenAI.

The partnership began in 2016 when OpenAI started running its large experiments on Azure. Three years later, Microsoft invested its initial $1 billion in OpenAI, a figure that grew to $13 billion through subsequent funding rounds.

However, in 2024, Microsoft began labeling OpenAI as a competitor in its financial reports, and early last year, the software giant lost its status as OpenAI’s exclusive cloud provider. In an internal memo earlier this month, Dresser wrote that OpenAI’s partnership with Microsoft has been “foundational to our success,” but “has also limited our ability to meet enterprises where they are.”

Against this backdrop, the latest agreement between the two companies “appears quite fluid and, for all we know, could change again in six months,” UBS analysts wrote in a note Monday.

Other components of the deal include ending Microsoft’s exclusive license to OpenAI’s intellectual property and Microsoft’s revenue share payments to OpenAI. Microsoft will also no longer be the sole cloud provider for API products built with third parties.

“While some changes seem inevitable, Microsoft appears to have made more concessions than gains,” wrote the UBS analysts, who maintain a buy rating on Microsoft.

Amazon CEO Andy Jassy called Monday’s announcement “very interesting” in a post on X, adding that more details would be shared Tuesday.

Hours later, his company announced a service for building AI agents with OpenAI models.

‘Original partner’

For years, developers interested in those models needed to go through Microsoft’s Azure cloud or work with OpenAI directly. Now, companies with large AWS investments will be able to more easily adopt the models, while taking advantage of volume spending plans.

Dresser, speaking from an Amazon event, said the reworking of OpenAI’s arrangement with Microsoft was not inspired by the growing collaboration with Amazon.

“Microsoft is our original partner,” she said. “They’re an incredible partner to us. They will be a premier partner as we move forward. What we are focused on is making sure, as we meet our customers where they are, that they have access to environments that they’re working in. And we want to make sure that we deliver the best models in the best environments for customers to be successful.”

The Financial Times reported that Microsoft considered legal action regarding OpenAI’s plans with Amazon, and Microsoft told the newspaper that it was “confident that OpenAI understands and respects the importance of living up to [its] legal obligation.” Microsoft didn’t provide a comment beyond Monday’s announcement.

Microsoft is similarly making moves to diversify away from OpenAI.

In September, Microsoft said it was starting to draw on an AI model from Anthropic to answer some queries in the 365 Copilot assistant for commercial clients. Two months later, Microsoft agreed to invest up to $5 billion into Anthropic, which committed to purchasing $30 billion of Azure compute capacity.

Taking advantage of the surging popularity of Anthropic’s Claude Code, Microsoft announced in March an offering called Copilot Cowork in cooperation with Anthropic.

One downside of soaring demand for Claude is that reliability has suffered. The company reported partial or major outages during 37 of the past 90 days. Amazon, an early Anthropic partner and investor, has taken notice.

Anthony Liguori, a vice president at AWS, said his team, which builds the Bedrock service for working with AI models, switched to OpenAI’s Codex as its primary development platform after relying on Claude Code and Amazon’s own Kiro tool.

The reality for all the major parties involved is that they need each other.

Capacity is so constrained that OpenAI and Anthropic need to work with all of the major cloud vendors to secure as much compute as possible. And Microsoft and Amazon need simple access to all the major models to serve their massive customer bases.

So while Microsoft and OpenAI may be drifting apart, Jaluria was quick to note, “Microsoft still needs OpenAI, and OpenAI still needs Microsoft.”

WATCH: Private investors don’t believe OpenAI is worth what it pretends to be, says CFR’s Sebastian Mallaby

Technologies

Trump Maintains US‑Iran Negotiations Continue Amid Tehran’s Denials of Duplicity

President Trump insists that US‑Iran talks are ongoing despite Tehran’s denial of any negotiation plans, while warning that only a deal or total surrender will allow passage through the Strait of Hormuz. Conflicting statements from both sides have heightened uncertainty as the conflict enters its sixth month.

On Monday, President Donald Trump asserted that negotiations between the United States and Iran are still taking place, even after Tehran stated it has no intention of engaging in direct talks with Washington.

In a fiery Truth Social post, Trump labeled Iran’s leaders “unbelievably duplicitous,” claiming they are lying about ongoing peace talks “whether Iran wants to admit it or not.” He repeated his assertion that the United States completely controls the Strait of Hormuz, despite maritime traffic through the crucial route lingering at only a small fraction of pre‑conflict levels.

He wrote, “Nothing reaches Iran unless we allow it, and nothing will pass unless a deal—or total surrender—is achieved.”

Earlier that day, Iranian Foreign Ministry spokesperson Esmail Baghaei told reporters there is no imminent plan for U.S.–Iran negotiations, contradicting Trump’s earlier comment that talks would resume Monday afternoon. Baghaei added that Iran’s only current discussions are with Oman concerning the Strait of Hormuz.

The conflicting statements have heightened uncertainty over the peace‑talk process and the broader conflict, now in its sixth month.

Trump’s assertion about new negotiations came a day after he said on Truth Social that he had agreed to cancel a massive strike against Iran “subject to being able to rapidly make a DEAL.” He said in the same post that Iran and other Middle Eastern countries had asked him to hold off on that attack because “the perimeters of a deal has been agreed to.”

Trump has claimed dozens of times throughout the more‑than‑five‑month‑long war that a deal is at hand. No permanent deal has been signed, and a temporary ceasefire reached in June has fallen apart.

Trump has also repeatedly threatened to launch devastating strikes against Iran before backing off. After the latest example, oil prices on Monday fell and stocks surged.

BMI, a research unit of Fitch Solutions, said in a note Monday that a broader diplomatic understanding on reopening the Strait of Hormuz is still achievable this quarter, while raising the probability of its escalation scenario to 35% from 25%, citing mounting military, diplomatic and economic signs of rising U.S.-Iran tensions.

“Diplomatic progress is likely to be punctuated by periodic military flare-ups, while miscalculation by either side could trigger a renewed escalation,” BMI analysts wrote in a note. The firm said the key issue to watch is the future governance of the strait, as the Iran-Oman talks — potentially backed by Gulf states, China and the U.S. — point to efforts to build a post-conflict shipping framework.

Shipping risks persist even as diplomacy appears to be advancing. The United Kingdom Maritime Trade Operations Centre said it received a report of an incident 20 nautical miles (23 miles) northeast of Khasab, Oman — at the mouth of the strait — with a tanker’s master reporting an explosion in close proximity to the vessel at about 20:37 UTC Sunday (4:37 pm ET). The vessel and crew were safe and authorities are investigating, UKMTO said, advising ships to transit with caution.

The proposal Trump announced over the weekend calls for the U.S. and Iran to return to negotiations and continue ironing out some of the thorny issues that had derailed diplomatic efforts, according to The Associated Press, citing a regional official involved in the mediation efforts.

The official said the proposal also includes a reopening of the Hormuz Strait and halting attacks across the region, including by Iranian-backed militias in Iraq on the Arab Gulf countries and Jordan.

The U.S., for its part, will end its naval blockade on Iran and allow Tehran to export its oil, the official said, adding that no deal has been reached, although the mediation efforts remained underway.

Trump’s weekend reversal has lowered the temperature after days of escalating attacks across the Gulf. Kuwait said Saturday that Iranian forces launched a wave of drones within its airspace, with its military destroying multiple aircraft after Iran targeted critical infrastructure in the country’s north.

A parallel track with Muscat is also advancing. Iranian diplomats said Tehran was close to reaching a new arrangement with Oman to manage shipping through the Strait of Hormuz, a deal critical to preventing the war from escalating further, according to the Financial Times.

Iranian officials said negotiations over future management of the Hormuz Strait with Oman, which sits on the opposite shore of the waterway, are in their final stages. The agreed shipping route would be different from those used before, according to Iran’s Foreign Ministry spokesperson, Baghaei, adding that the new route was separate from the issue of the strait’s reopening or continued closure.

Technologies

Oil Prices Slide as Trump Halts Planned Iran Strike

Oil prices dropped after Trump cancelled a planned strike on Iran, with WTI down about 5% and Brent near 5% lower. He said the move followed requests from Tehran and regional allies for a pause while a deal shaping the Strait of Hormuz and Iran’s nuclear program is negotiated.

Oil prices fell on Monday after President Donald Trump announced he had cancelled a planned strike on Iran. WTI futures dropped roughly 5% to $80.34 a barrel, while Brent slipped about 4.7% to $83.77 a barrel.

Trump said early Sunday he called off the strike after Iran and several Middle Eastern nations asked him to hold off, noting that the outlines of a deal had been agreed upon. He added that the prospective accord would entail the immediate, full opening of the Strait of Hormuz and an end to Iran’s nuclear ambitions, according to his Truth Social post.

The president had been considering another round of strikes as diplomatic hopes waned since the conflict began on February 28. He said the U.S. and Iran would meet for talks on Monday, but Iran denied any scheduled negotiations with Washington, citing PressTV. Iran’s foreign‑ministry spokesperson Esmaeil Baghaei clarified that Tehran was only discussing shipping routes through the Strait of Hormuz with Oman. In a follow‑up Truth Social message, Trump insisted that, regardless of Iran’s acknowledgment, the United States is indeed discussing a solution to a long‑standing problem created by Iran.

Technologies

Oil Prices Drop as Trump Cancels Planned Attack on Iran

Oil prices fell sharply after President Trump announced the cancellation of a planned strike on Iran, citing a new deal that would open the Hormuz Strait and end Iran’s nuclear threat.

Oil prices fell sharply on Monday after President Donald Trump announced that he had called off a planned strike on Iran.

West Texas Intermediate futures, the U.S. benchmark, slipped roughly 5% to close at $80.34 per barrel, while Brent crude, the international benchmark, declined 4.7% to settle at $83.77 a barrel.

Trump made the announcement early Sunday, saying he had canceled the strike following requests from Tehran and other Middle Eastern countries.

In a Truth Social post, he wrote: “We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to.”

The president indicated that the proposed agreement would include the immediate, complete, and total opening of the Hormuz Strait, as well as an end to Iran’s nuclear threat.

Trump had been weighing additional strikes amid diminishing prospects for a diplomatic resolution to the conflict that began on Feb. 28. He stated that the U.S. and Iran would hold negotiations on Monday.

Tehran denied that talks were planned with Washington, according to state news outlet PressTV.

Iran’s Foreign Ministry spokesman Esmaeil Baghaei said Tehran was only holding talks with Oman regarding the routes ships can use through the Strait of Hormuz.

In a subsequent Truth Social post, Trump added that whether “Iran wants to admit it or not, we are, in fact, talking of a solution to a problem that they have caused for decades.”