Microsoft may sue Amazon and OpenAI over AWS hosting OpenAI’s Frontier model, breaching their Azure-exclusive deal.

Microsoft is reportedly considering legal action against Amazon and OpenAI over a $50 billion cloud deal that could violate Microsoft’s exclusive partnership, which requires OpenAI’s models to be hosted on Azure. The dispute centers on whether Amazon Web Services can offer OpenAI’s Frontier product directly, potentially bypassing Azure. Meanwhile, OpenAI has secured a new agreement with the U.S. Department of Defense to provide AI access through AWS for both classified and unclassified projects, following the Pentagon’s decision to end its partnership with Anthropic due to ethical restrictions on military use. The shift marks a major development in government AI adoption and intensifies competition among tech giants over cloud infrastructure and AI distribution rights.