NEW DELHI: The AI race is getting a little more clouded. Meta Platforms has emerged as one of Microsoft’s biggest customers for artificial intelligence, spending hundreds of millions of dollars a year to access AI models through Microsoft’s Azure cloud service, Bloomberg reported.
Meta is also processing trillions of AI tokens every week through Azure, highlighting the sheer scale of computing and model usage behind the social media giant’s AI ambitions.
The development offers a glimpse into an interesting dynamic in the AI boom: while cloud companies are increasingly pitching artificial intelligence to businesses across industries, some of their biggest customers remain technology companies already building AI capabilities of their own.
Microsoft provides access to models from multiple providers through its Foundry marketplace, which had 100,000 customers as of July. Yet several of its largest AI customers are tech companies, with ByteDance, the Chinese owner of TikTok, generally ranking as the biggest Foundry spender, according to Bloomberg.
Other major customers include Adobe, AI company Perplexity and Sierra, the customer-service AI start-up co-founded by OpenAI chairman Bret Taylor.
The concentration of spending among a handful of technology companies also raises questions about Microsoft’s AI revenue mix. OpenAI accounted for about 70 per cent of Microsoft’s overall AI revenue in its most recent fiscal year, according to the report.
Microsoft’s AI business extends beyond Foundry, with revenue also coming from products such as Copilot and from providing computing capacity for AI workloads.
For Meta, using Microsoft’s platform is part of a broader strategy of mixing its own AI development with access to external models. The company is buying access to models through multiple platforms depending on factors such as availability and cost.
People familiar with the matter told Bloomberg that Meta developers have also used OpenAI technology through Foundry to evaluate the performance of Meta’s own AI models.
Meta Chief Technology Officer Andrew Bosworth has previously said the company rents leading AI models as part of its development process, even as it invests in its own models and infrastructure.
But Meta is also working on reducing its dependence on external platforms. The company is developing an API business that could allow customers to access different AI models, potentially putting it in competition with Microsoft Foundry while giving Meta another route to monetise its AI infrastructure.
The relationship between the two companies also has some history. Microsoft technology has supported parts of Meta’s products before, including Bing, which powered web searches on Facebook beginning in the late 2000s. Meta had stopped using Bing by the end of 2014.
Microsoft also provided computing capacity for Meta’s AI development before the current generative AI boom making today’s Azure relationship less a new connection than an old technology partnership returning with considerably more horsepower.