OpenAI’s multi-year partnership with Snowflake helps the generative AI model maker put its technology in front of a different range of users than those served by the data platform provider and shows where the AI ​​model race is short.
OpenAI and cloud data vendor Snowflake said on February 2 that they have signed $200 million settlement Providing AI modeling capabilities to Snowflake’s enterprise customers. deal is made OpenAI model Natively available to Snowflake’s global customers Snowflake Cortex AIA managed service that integrates large language models and machine learning techniques into the Snowflake platform. Snowflake will use OpenAI’s ChatGPT Enterprise internally for its employees.
The partnership shows that OpenAI, seen as a laggard in the race to deliver AI products and services to businesses, continues to indirectly target enterprise customers by forming relationships with enterprise platform providers. Last month, the model maker revealed Partnership with ServiceNow.
Model and reach
The deal is a testament to the consolidation in the AI ​​model market, with many players starting to trust the three leaders: Google, Anthropic and OpenAI. The commoditization of enterprise-ready models indicates that most enterprise platform providers will seek relationships with these vendors to attract their customers.
“Companies like Snowflake are trying to form these partnerships as a way to potentially make a difference in the market,” said Arun Chandrasekaran, an analyst at Gartner. He said the consensus a year ago was that the more models, the better. SaaS and platform providers did not see the need to partner exclusively with model makers because the model market was still open, but this is changing, leading to vendors making deals with major model players and integrating models into their technology.
Chandrasekaran said, “It’s a way to signal the fact that we have what you want, and more importantly, that we have it tightly integrated into our product, our platform, and your workflow.”
For OpenAI, its partnerships with Snowflake and ServiceNow help re-emphasise to the AI ​​market that its models are still important and as useful and reliable as they were in the beginning, he continued.
“OpenAI is trying to create a broader channel ecosystem by partnering with many of these … providers to show that there is still a lot of premium left in the model and a way to get access to enterprise customers,” Chandrasekaran said.
With the Snowflake partnership, OpenAI gets access to new enterprise customers and new roles within the enterprise as Snowflake’s primary focus has been on data engineers, data scientists, and business analysts. In contrast, OpenAI has so far focused mostly on developers, he said.
make money
However, the biggest question for OpenAI is how Snowflake will compensate the AI ​​vendor for using its models, said Marc Becque, an analyst at Omdia, a division of Informa TechTarget.
“Is it trading compute, which would be some kind of circular thing? Is it licensing? Is it revenue share?” Beku continued. “What difference does it make that they’re getting paid?”
Although Snowflake and OpenAI have disclosed the value of the agreement, it is not clear whether the agreement has been reached or not Revenue for OpenAI. Furthermore, for A company preparing to go publicDeals like OpenAI help like this, Becque said, but they don’t solve OpenAI’s profitability problem.
The model maker estimates that 2029 will be the year it expects revenues and cash flows of $125 billion.
“Currently only 22 companies on the planet have revenues of $125 billion or more,” Becque said.
To achieve its goal, OpenAI is moving away from its no-ad strategy to offer advertisements on ChatGPS’s free tier, which could be a way to generate cash flow, Becque added.
“Ad-supported consumer advertising is the only viable path forward and it’s unsustainable,” he said.
