The Zhitong Finance App learned that Meta Platforms (META.US) has become one of Microsoft (MSFT.US)'s largest artificial intelligence (AI) customers, which highlights that demand for emerging AI technology is still highly concentrated in the technology industry. According to a source familiar with the matter, Meta spends hundreds of millions of dollars every year to obtain AI models through Microsoft's Azure cloud service. The source said that Meta uses trillions of tokens every week through this platform — a unit for measuring AI computational consumption.
An important part of Microsoft's AI strategy is to provide models from different vendors through a marketplace platform called Foundry. As of July, Foundry had 100,000 customers. Microsoft's promotional materials often feature customers from traditional industries such as manufacturing and transportation.
However, according to people familiar with the matter, most of Microsoft's biggest AI customers are still other technology companies. One person familiar with the matter said that other major customers include Adobe (ADBE.US), artificial intelligence company Perplexity, and customer service AI startup Sierra, which was co-founded by OpenAI Chairman Bret Taylor.
Microsoft is particularly dependent on a few technology customers. Its long-term partner OpenAI contributed about 70% of Microsoft's overall AI revenue in the last fiscal year. In addition to providing model access services, Microsoft also provides the AI assistant CoPilot and leases AI-oriented computing capabilities.
According to people familiar with the situation, Meta is investing heavily in AI to support software development efforts. Companies will purchase model access through multiple platforms based on the availability and cost of use of the different models. One of the people familiar with the matter said that Meta developers have used OpenAI's technology through Foundry to help them evaluate the output results of their own models.
While attending the “Big Technology” podcast in July, Meta's chief technology officer Andrew Bosworth explained that in addition to developing its own AI models, Meta will also rent other leading models as part of its own development process.
At the same time, Meta is also building its own business to provide customers with access to various AI models. Such so-called API services may compete with Foundry in the future. This will help Meta reduce spending on external services such as Microsoft.
Previously, Meta also relied on Microsoft technology, then replaced it with self-developed solutions. Since the late 2000s, Microsoft's search engine Bing has provided Facebook with web search support. By the end of 2014, Meta had stopped using Bing. In the years before ChatGPT launched and sparked the current AI boom, Microsoft also provided Meta with computing power for AI development. Since then, Meta has become one of the world's largest AI data center builders to support the development of its AI models.
Notably, the fact that Microsoft's biggest AI customers are still other tech companies isn't good news for some investors. For AI to truly meet market expectations, this technology must be widely applied to the entire economic system, not only by technology companies with strong technical capabilities, especially as the potential disadvantages of concentrated revenue and circular business transactions between enterprises have plagued the technology industry in recent years.