Meta spends hundreds of millions on Microsoft's AI services

Insight summary

• •Meta spends hundreds of millions annually on Microsoft's Azure AI services.
• •Meta uses OpenAI models via Microsoft's Foundry marketplace to benchmark its own AI models.
• •Meta is developing its own API service that may compete with Microsoft's Foundry.
• •Microsoft’s largest AI clients are mostly tech companies, with ByteDance, Adobe, Perplexity, and Sierra among top Foundry users.
• •About 70% of Microsoft's AI revenue is generated from OpenAI, primarily through massive Azure compute purchases.
• •Foundry marketplace revenues represent only a small portion of Microsoft's overall AI business.