SAN FRANCISCO: AWS and Microsoft want to embed thousands of their own engineers at client companies to help them capitalize on artificial intelligence (AI), which has yet to turn a profit in the business world.
Microsoft announced Thursday the creation of a unit called Microsoft Frontier Company, which is backed by a US$2.5 billion (RM11 billion) investment and brings together 6,000 experts and engineers.
The new Microsoft entity comes as rival AWS, the world’s leading cloud provider, announced Tuesday a similar US$1 billion investment in an organisation called Forward Deployed Engineering, also tasked with dispatching thousands of engineers to help clients.
The two cloud giants are responding to the same challenge: companies are buying more AI tools, but those investments are not yet paying off in obvious ways.
As of the end of 2025, almost nine out of 10 companies had deployed AI in at least one business function, but 94% reported no significant benefit from those expenditures, according to consultancy McKinsey.
Its study, published in late April, argued that handing out AI tools to employees is not enough – companies need to rethink the very way they work.
Microsoft and AWS, both of which supply servers and software to myriad businesses worldwide, are betting that their engineers will deliver results faster and better than clients’ in-house teams.
“The currency that the customers are always talking about right now is speed,“ said Francessca Vasquez, vice-president of Frontier AI Engineering and Services at AWS.
Sri Elaprolu, Director of AWS’s GenAI Innovation Centre, said the key is resisting the temptation to lead with the technology.
“Just because someone is excited about agentic AI doesn’t mean agentic AI is the right answer,“ he told AFP at the AWS Summit conference in Washington.
“The wrong way of going about it is forcing a technology into a problem versus working backwards to define what’s the right steps to get there.”
With these initiatives, Microsoft and AWS are following the lead of San Francisco’s major AI labs.
OpenAI, the creator of ChatGPT, and its rival Anthropic, maker of Claude, dispatched their own teams of engineers among client sites this spring, partnering with major investment funds.
In doing so, the AI labs revived an idea pioneered more than a decade ago by Palantir, the US data analytics specialist.
Judson Althoff, CEO of Microsoft Commercial Business, said the new unit draws from existing industry experts, product engineers and consulting teams, as well as outside hires.
“We’re also hiring a lot of world-class AI talent – people that have developed large language models and fine-tuned large language models at the face of the customer,“ he said.
The push comes as tech giants seek to recoup record investments to develop AI and build massive data centres.
Despite strong growth in its cloud business, Microsoft has disappointed markets and its shares have shed nearly a quarter of their value since January.
The company cut roughly 15,000 jobs in 2025 and a further wave of cuts is expected.
