Microsoft Courts OpenAI Rival Databricks to Power Azure AI Tech

After aligning itself with ChatGPT makers OpenAI, Microsoft appears to be playing the field, striking a deal with OpenAI's rival Databricks to sell its software.

Tech publication The Information reports that Microsoft plans to sell Databricks’s AI tech via its Azure cloud-server offering.

Databricks’ tech enables companies to build AI models from scratch or even repurpose existing open-source models to fit their needs – a direct opposite to OpenAI’s proprietary models like GPT-4.

Citing people familiar with the plan, The Information said that the Azure-Databricks offering would see Azure customers able to use Databricks' software to build applications more simply – with the ability to understand the data going into it.

Microsoft is reported to have begun demonstrating the service to some Azure customers and could announce the new offering “in the coming months.”

Databricks on the rise

For Databricks, the reported Microsoft deal represents another rise for the company.

After launching open-source models Dolly and Dolly 2.0, the OpenAI rival snapped up AI startup MosaicML in a deal worth $1.3 billion in late June.

Databricks already serves Fortune 500 companies. It received significant backing from Andreessen Horowitz.

Microsoft was also among its earlier investors – a notable inclusion in its series E back in 2019. The likes of AWS, Salesforce Ventures and Alphabet-owned growth equity firm CapitalG have also invested in the OpenAI rival.

Related:Microsoft Offers Private, Customizable ChatGPT to Enterprises

The deal with Microsoft couldn’t come soon enough – it’s trying to get back in the green after losing around $900 million, excluding depreciation and amortization, in its last two fiscal years. Earlier this week, The Information reported that Databricks is trying to raise more cash to expand the business.