Snowflake-OpenAI $200M Direct Deal: Microsoft Bypassed

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Snowflake-OpenAI $200M Direct Deal: Microsoft Bypassed

  • Snowflake signs $200 million multi-year direct contract with OpenAI
  • Abandons Azure intermediary approach for first-party integration
  • Provides native GPT-5.2 to 12,600 enterprise customers

What Happened?

Snowflake has forged a $200 million multi-year partnership with OpenAI.[BusinessWire] The key point is direct deal. They ditched the existing Azure intermediary and went straight to OpenAI. Baris Gultekin, AI Vice President, described it as “a first-party partnership without going through cloud providers.”[SiliconANGLE]

GPT-5.2 will be natively available across AWS, Azure, and GCP in Cortex AI.[The Register]

Why Does It Matter?

Frankly, the core issue is Microsofts absence. They bypassed their largest backer who invested $13 billion. Its a clear choice for direct deal without middleman.

The trend of data platforms directly embracing AI is accelerating.[WebProNews] Competitor Databricks also recently raised $4 billion at a $134 billion valuation. The era of shrinking cloud vendor intermediary margins is here.

Personally, I find Snowflakes model-agnostic strategy brilliant. Besides OpenAI, they offer Anthropic, Meta, and Mistral, so customers can swap models without moving their data.

What Comes Next?

Both companies will jointly develop AI agents using OpenAIs Apps SDK and AgentKit. Once Snowflake Intelligence is enhanced with GPT-5.2, even non-developers can analyze data using natural language.

Cortex Code, a coding agent, is also worth noting. It generates SQL, Python, and data pipelines from natural language. Canva and WHOOP are participating as early customers.[BusinessWire]

Frequently Asked Questions (FAQ)

Q: Wont enterprise data leak externally?

A: No. Since OpenAI models are natively integrated into Snowflake Cortex AI, enterprise data never leaves the Snowflake environment. Existing governance controls remain intact through Snowflake Horizon Catalog. A 99.99 percent uptime SLA is guaranteed, and the same security level applies across all three major clouds. This structure is particularly meaningful for enterprises in finance, healthcare, and public sectors where data sovereignty matters. The key point is no need to modify existing security policies.

Q: Is the relationship with Microsoft completely over?

A: Not completely. Snowflake still operates services across three major clouds including Azure. What changed is only the OpenAI model access method. It switched from Azure intermediary to direct integration. From Microsofts perspective, its losing one intermediary fee stream, but the cloud infrastructure business itself and Azure customer base remain unchanged. The relationship isnt severed; just one channel changed.

Q: Can I use models other than OpenAI on Snowflake?

A: Absolutely. Snowflake officially advocates a model-agnostic strategy. Besides OpenAI, they offer multiple frontier models including Anthropic Claude, Meta Llama, and Mistral. Customers can freely choose or combine models based on use case, cost, and performance requirements. Not being locked into any specific vendor is Snowflakes core message. Think of it like an open-book exam where you pick the best tools.

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