Why Microsoft CEO Satya Nadella Feels ‘Very Good’ About New OpenAI Deal While Amazon Adds GPT Models To AWS

• Nadella cited three reasons why Microsoft is in a comfortable spot.
• OpenAI and Microsoft announced an amended agreement earlier this week. 
• Amazon said that OpenAI’s GPT-5.4 is available on Amazon Web Services, with GPT-5.5 expected to arrive in the coming weeks.

Microsoft Corp.’s management struck an upbeat tone on its recently revamped partnership with OpenAI, even as Amazon said it would offer the AI firm’s flagship models on its cloud platform for customers.

“We've all evolved the partnership, but I feel very good about where we are,” CEO Satya Nadella said on Microsoft’s analyst call on Wednesday. “It starts with, quite frankly, IP... We have a frontier model royalty-free with all the IP rights that we will have access to all the way to '32 and we fully plan to exploit it."

Earlier this week, Microsoft and OpenAI announced a revamped deal that allows OpenAI to sell its products on any cloud provider, a freedom it has long sought, though Microsoft will continue to use them through 2032. 

As part of the updated agreement, OpenAI will continue to share revenue with Microsoft until 2030, albeit with new caps, but Microsoft will no longer pay a revenue share to OpenAI. 

Microsoft is a significant investor – and one of the earliest – in OpenAI and was, until recently, its exclusive cloud vendor. When OpenAI converted its structure last October, Microsoft said it acquired a 27% stake in the for-profit venture and an incremental $250 billion purchase commitment from OpenAI for Azure services.

“The second part, of course, is them as a customer of ours, they're a large customer of ours, not just on the AI accelerator side, but also on all the other compute side... And then, of course, we have our equity," Nadella said. 

CFO Amy Hood added: "I would say is having the revenue share exists through 2030 and the predictability of that is a real positive for us. And then as you put out, that Satya pointed out, the thinking about that as royalty free with the elimination of our rev share to them."

Microsoft Azure’s Performance

Microsoft reported a 39% increase in Azure sales last quarter, beating analysts’ estimate of 38% growth, and forecast a 40% increase in the current quarter and a "modest acceleration" in the second half of the calendar year. 
 

However, Microsoft stock was muted in after-hours trading on Wednesday, as investor focus shifted to the company’s hefty capital expenditure plans – $190 billion for 2026 versus the $154.6 billion consensus – despite the prior quarter’s revenue and profit beating Street expectations.

To be sure, Azure’s sequential revenue growth acceleration lagged that of Google Cloud and Amazon Web Services. 

OpenAI Drifts Towards Amazon

Meanwhile, OpenAI is subtly drifting over to Amazon. In November, OpenAI disclosed a $38 billion commitment with Amazon Web Services. And in late February, Amazon said it would invest $50 billion in OpenAI, which would, in turn, use 2 gigawatts of AWS’s custom Trainium chips to train AI models.

On its earnings call on Wednesday, Amazon said it added OpenAI’s GPT-5.4 to Bedrock, an AWS platform that lets customers build and scale AI applications, with the GPT-5.5 model expected to arrive in the coming weeks.

"People for a long time have wanted to consume OpenAI models in Bedrock,” Amazon CEO Andy Jassy said. “The one thing you learn over and over again with every technology... is that customers want choice. There is not one tool to rule the world, and they want choice."

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