Meta Platforms Inc. has become one of the largest consumers of artificial intelligence services from Microsoft Corp., highlighting the high concentration of demand for this developing technology specifically within the technology sector.
According to a source familiar with the situation, the social media company spends hundreds of millions of dollars annually on using AI models through Microsoft's Azure cloud service. This source reported that Meta uses trillions of tokens weekly—a unit of consumption for AI computations.
Both companies declined to comment on the matter.
A key part of Microsoft's AI strategy is providing models from various vendors through a marketplace called Foundry, which had one hundred thousand clients as of July. Although Microsoft's promotional materials often feature clients from traditional industries such as transportation or manufacturing, most of the largest AI clients are currently other technology firms.
Bloomberg previously reported that ByteDance, the Chinese developer of the TikTok application, was generally the largest consumer of Foundry. Other major customers mentioned include Adobe Inc., the firm Perplexity, and the startup Sierra, which specializes in AI for customer service and was co-founded with OpenAI chairman Bret Taylor.
In recent years, the technology industry has seen issues related to income concentration and circular transactions. For AI technology to meet expectations, it must be widely adopted across the entire economy, not just among high-tech companies.
Microsoft relies heavily on a small number of clients from the technology sector. OpenAI, a long-time partner of the company, provided about 70% of Microsoft's total AI revenue in the last fiscal year. In addition to access to models, Microsoft offers the AI assistant Copilot and provides AI-focused computing power.
According to insiders, Meta is actively investing in AI to support its software development efforts by accessing models through multiple platforms depending on their cost and availability. One source noted that Meta developers used OpenAI technologies via Foundry to evaluate the results of their own models.
Besides creating its own AI models, Meta rents other leading models as part of its development process, as explained by CTO Andrew Bosworth during an appearance on the 'Big Technology' podcast in July. Furthermore, Meta is creating its own business to sell access to various AI models—a so-called API service—which could potentially compete with Foundry, allowing Meta to reduce costs for external services, such as those from Microsoft.
Previously, Meta used Microsoft technologies before transitioning to internal solutions. Microsoft's Bing search engine supported web search in Facebook starting in the late 2000s. However, as Reuters reported, Meta stopped using Bing by the end of 2014.
Microsoft also provided Meta with computing power for AI development years before the current boom following the release of ChatGPT. Since then, Meta has become one of the largest data center developers to power its model development.
