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Microsoft allegedly plans to sell Databricks AI software on Azure to rival OpenAI

Microsoft is reportedly in the works to offer a new version of Databricks' artificial intelligence (AI) software on its Azure cloud platform. This would allow Microsoft to offer Databricks' machine learning (ML) and data analytics tools to Azure customers as part of its cloud services.

Databricks provides an AI-powered data analytics platform to help organizations build their own AI models. However, this deal contrasts with OpenAI's approach of developing proprietary AI models and licensing them to partners like Microsoft. The two companies work closely on Microsoft 365, Windows, Bing and more.

By offering Databricks' software on Azure, Microsoft aims to meet the growing enterprise demand for customized AI tools. This allows companies to leverage AI in applications tailored to their specific business needs.

Microsoft has aggressively invested in expanding its AI capabilities across products like Azure, Microsoft 365 and GitHub. Integrating and selling Databricks on Azure would further enhance its ability to provide AI solutions to its commercial customers.

In response to Reuters' request for comment on the potential partnership, neither Microsoft nor Databricks responded.

This new initiative builds on Microsoft's existing partnership with Databricks. In 2018, the companies announced a collaboration to bring Databricks' data analytics and AI platform to Azure as a first-party service.

Selling Databricks directly through Azure would make the AI software more easily accessible to Microsoft's base of cloud customers.

In July, Microsoft reported more than $30 billion in revenue from cloud services, which includes its Server products and cloud services, cementing its position as the second-largest cloud provider behind AWS.

Microsoft's chief financial officer Amy Hood made a special mention of the company's cloud revenues:

We delivered a solid close to the fiscal year driven by Microsoft Cloud quarterly revenue of $30.3 billion, up 21% (up 23% in constant currency) year-over-year.

Also, its Intelligent Cloud division came in at $24.0 billion, up 15 percent from a year ago. It mentioned that its Azure and its other cloud services revenue increased by 26 percent.

Source: The Information (paywall)

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