AI Deployment Wars Heat Up: AWS, MSFT Push War Chest to $10B

**Bob Evans** (0:00)
Hello, my friends, and welcome back to Cloud Wars Minute. In a very interesting development here that we might have anticipated last year, but it's really bubbled up over the last two months. So, I'm calling the AI deployment wars. We see the five largest AI companies, that is Google Cloud, Microsoft, AWS, OpenAI, and Anthropic, are now all saying or realizing that, in addition to this incredible technology they're pumping out, they have to actually ensure that all that cool stuff works for customers and that it delivers quantifiable business results, business value, and business outcomes. That hasn't been the case, or it hasn't been the case frequently enough or extensively enough. So, these five big companies are all now engaging in these AI deployment wars. Some of them are forming wholly owned subsidiaries, or done with investors, investing big amounts in their ecosystems, and the latest have been AWS and Microsoft, which put in those two companies 3.5 billion, pushing the total now to about $10 billion into this deployment war chest. So, I've got a detailed article later this morning on cloudwars.com, that goes into all the numbers on this, and I want to mention a couple of highlights here today about this, because this is clearly a case of a couple of things going on. One, we see these tech companies who've always said, I don't want to be in the services business. Now, they have to get a little bit into the services business. They are all relying on the coolest three-letter acronym of the year, FDE, for deployed engineers. And they're all saying they're doing this to help customers, to co-create and collaborate with customers, to do things that the customers aren't able to do themselves, and require some deep engineering expertise from these vendors. So it's not just that these numbers that I'm going to share with you, it isn't the biggest is going to win or the biggest is the best. It shows a little bit of need. The bigger established companies, so I'm setting aside for now OpenAI and Anthropic, relatively young companies.
They have had to put together a lot of this, so big money coming there, but there's also big numbers across the board. So first, Google Cloud, number one on the Cloud Wars top 10, they announced a couple months ago, a $750 million ecosystem fund to help partners develop a Agenic AI applications and capabilities that will help their customers get up to speed. So Google Cloud is not staffing up or building its own deployment company. They're doing this exclusively through the ecosystem.
OpenAI, $4.15 billion that they're investing in this. Four billion so far themselves and outside investors have put into a new deployment company plus $150 million to their ecosystem. Anthropic, it's about $1.5 billion and all these companies, other than Google Cloud, is a combination of four deployed engineers and partners. AWS said we're going to put a billion dollars into it. I think they're calling this forward deployed engineering. They're taking that term right into the business. Microsoft, $2.5 billion. They're calling those the Microsoft Frontier Company. I don't understand the naming of that unless they're trying to harken back to the early days of the US opening, exploring the frontier.
So anyway, we can talk about that later, but these numbers here together add up to $9.9 billion. I rounded up to $10 billion. I hope you'll excuse me for that. And also I think the big point here is despite, in addition to what the different vendors are doing, on the customer side, the stakes are enormous because CEOs are very excited. They see the potential. They've bought into the potential of what AI can do. The problem is they're saying, we're spending a lot of money on it. We're devoting a lot of time. We're devoting a lot of thinking and energy and focus to this, but we're not seeing the tangible business outcomes. And so these tech vendors realize, sorry for the banging here, I'm competing with a little noise. You got some construction going on here at world headquarters.
But these CEOs on the customer side are saying, the great potential isn't enough. The teams that I've put together are doing some great work, but it's not enough. We need to get this deep-seated engineering capability from these big tech vendors to ensure that these new AI transformation initiatives aren't just talk and aren't just promise, but actually deliver tangible business outcomes. More and more that's come to the front. I think that's a great thing. Could have happened a while back. The other thing I'd say is I think this $10 billion, that's just gonna be the ante. I think those stakes are gonna go up over time and such is the cost of doing business here in the Cloud Wars. Thanks for being with us here for Cloud Wars Minute and I hope you have a fantastic day.