AWS and Microsoft want to send thousands of their engineers to customer companies to help them take advantage of artificial intelligence, which is not yet profitable in the business world.
Microsoft on Thursday announced the creation of a division called Microsoft Frontier Company, which will bring together 6,000 experts and engineers with an investment of US$2.5 billion.
Microsoft’s new entity comes after rival AWS, the world’s leading cloud provider, announced a similar $1 billion investment on Tuesday in an organization called Forward Deployed Engineering, which will also be tasked with deploying thousands of engineers to help clients.
The two cloud giants are addressing the same challenges. Businesses are buying more AI tools, but their investments haven’t yet paid off in any tangible way.
According to consultancy McKinsey, by the end of 2025, nearly nine out of 10 companies have implemented AI in at least one business function, but 94% report not seeing significant benefits from those spends.
The study, published in late April, argues that simply handing out AI tools to employees is not enough; companies need to rethink the way they work.
Microsoft and AWS both supply servers and software to countless companies around the world, betting that their engineers can deliver faster and better results than their customers’ in-house teams.
“Customers are always talking about speed now,” said Francesca Vazquez, vice president of Frontier AI Engineering and Services at AWS.
Sri Elaprolu, director of AWS’s GenAI Innovation Center, said the key is to resist the temptation to take the lead with technology.
“Just because someone is excited about agent AI doesn’t mean agent AI is the right answer,” he told AFP at the AWS Summit conference in Washington.
“The wrong way to do it is to shoehorn technology into the problem and work backwards to define the right steps to get there.”
“World-class talent”
With these efforts, Microsoft and AWS are following the lead of San Francisco’s leading AI lab.
OpenAI, the creator of ChatGPT, and Anthropic, the creator of its rival Claude, partnered with a major investment fund this spring to send their teams of engineers to customer sites.
In doing so, the AI Lab revived an idea pioneered more than a decade ago by US data analytics specialist Palantir.
Judson Althoff, CEO of Microsoft Commercial Business, said the new division is drawing on existing industry experts, product engineers and consulting teams, as well as external talent.
“We also employ a large number of world-class AI talent, people who have developed large-scale language models and fine-tuned large-scale language models right in front of our customers,” he said.
The move comes as tech giants seek to recoup record investments in developing AI and building massive data centers.
Despite Microsoft’s strong growth in its cloud business, it has disappointed the market, with its stock price falling by nearly a quarter since January.
The company is cutting about 15,000 people in 2025, and further cuts are expected.
