4 ms·

Considering that Microsoft is a huge investor in OpenAI, I'd be surprised they pay anything at all in reality.

gabereiser 3y ago
that's ridiculous, OpenAI is paying. Granted Microsoft invested heavily into OpenAI but those are two separate financial transactions. Sure you can rationalize in your head that IN-OUT=DIFF but that's not how books are kept.
- capableweb 3y ago
  Why is that ridiculous? Cloud services gives companies "coupons" and free usage for X hours for a bunch of other companies, why wouldn't they do that for a company they invested heavily in?
  - rickdeckard 3y ago
    Because that's not how it works. Even company cars of General Motors employees have to be purchased from General Motors. Such "free usage" coupons are marketing activities to gain new customers, Microsoft already completed the "dating phase" with OpenAI. They surely don't pay list-price for Azure but it's surely also not free. Moreover, as per Microsoft themselves, the 1bn USD investment into OpenAI carried the condition that Azure becomes the exclusive provider for cloud-services: https://blogs.microsoft.com/blog/2023/01/23/microsoftandopenaiextendpartnership/ https://blogs.microsoft.com/blog/2023/01/23/microsoftandopen... It's not exclusive because it's free, it's exclusive because "we paid you 1bn USD to buy it from us"
    - mattpallissard 3y ago
      I've personally worked on a project where Microsoft ate the cloud cost in order partner with us. They might not give unfettered credits, it could be for specific projects. That said, I wouldn't be surprised if it was unfettered either.
- nerdix 3y ago
  Microsoft invested $1 billion OpenAI in 2019 and half of that amount was in Azure credits. I'm not sure about the most recent $10 billion investment but I wouldn't be surprised if a significant amount of it is in Azure credits as well. While that's not "free" (they exchanged equity for it), it's likely not an expense (or at least not an expense that they have to cover fully).
dmix 3y ago
At best OpenAI has negotiated a near 0 profit margin for Microsoft when paying for the services. But even that is unlikely given how much money/resources are involved. There's no scenario where it's free at that scale.

that's ridiculous, OpenAI is paying. Granted Microsoft invested heavily into OpenAI but those are two separate financial transactions. Sure you can rationalize in your head that IN-OUT=DIFF but that's not how books are kept.

capableweb 3y ago
Why is that ridiculous? Cloud services gives companies "coupons" and free usage for X hours for a bunch of other companies, why wouldn't they do that for a company they invested heavily in?
- rickdeckard 3y ago
  Because that's not how it works. Even company cars of General Motors employees have to be purchased from General Motors. Such "free usage" coupons are marketing activities to gain new customers, Microsoft already completed the "dating phase" with OpenAI. They surely don't pay list-price for Azure but it's surely also not free. Moreover, as per Microsoft themselves, the 1bn USD investment into OpenAI carried the condition that Azure becomes the exclusive provider for cloud-services: https://blogs.microsoft.com/blog/2023/01/23/microsoftandopenaiextendpartnership/ https://blogs.microsoft.com/blog/2023/01/23/microsoftandopen... It's not exclusive because it's free, it's exclusive because "we paid you 1bn USD to buy it from us"
  - mattpallissard 3y ago
    I've personally worked on a project where Microsoft ate the cloud cost in order partner with us. They might not give unfettered credits, it could be for specific projects. That said, I wouldn't be surprised if it was unfettered either.
nerdix 3y ago
Microsoft invested $1 billion OpenAI in 2019 and half of that amount was in Azure credits. I'm not sure about the most recent $10 billion investment but I wouldn't be surprised if a significant amount of it is in Azure credits as well. While that's not "free" (they exchanged equity for it), it's likely not an expense (or at least not an expense that they have to cover fully).

dmix 3y ago

At best OpenAI has negotiated a near 0 profit margin for Microsoft when paying for the services. But even that is unlikely given how much money/resources are involved. There's no scenario where it's free at that scale.