Internal emails released through the ongoing Musk v. Altman trial have exposed the behind-the-scenes tensions at Microsoft as executives debated whether to invest in OpenAI — including fears that the AI startup could “storm off to Amazon” and “shit-talk” Azure if Microsoft declined to fund it.
The documents trace back to the summer of 2017, when OpenAI CEO Sam Altman responded to Microsoft CEO Satya Nadella’s congratulations email — sent shortly after OpenAI’s bot beat a Dota 2 professional — with a proposal for a deeper partnership. Altman estimated OpenAI needed roughly $300 million in Azure compute to expand its Dota 2 research, a figure that initially alarmed Microsoft’s Azure chief at the time, Jason Zander, who questioned whether the deal would generate at least $500 million in incremental revenue.
Altman later proposed an alternative arrangement involving Xbox and a technology-sharing agreement in exchange for expanded research sponsorship. The Xbox team expressed interest but could not commit to the research costs independently.
In January 2018, Microsoft CTO Kevin Scott weighed in with an email to Nadella acknowledging uncertainty about what Microsoft would gain from the deal — but flagging a specific concern about OpenAI’s growing influence in the AI community. “I guess the other thing to think about here is the PR downside of us not funding them, and having them storm off to Amazon in a huff and shit-talk us and Azure on the way out,” Scott wrote.
A year later, Scott sent another email to Nadella and Microsoft cofounder Bill Gates admitting he had been “highly dismissive” of OpenAI and Google DeepMind’s earlier work. His reassessment, prompted by OpenAI’s shift toward natural language processing, contributed to Microsoft announcing a $1 billion investment in OpenAI roughly one month later.
The revelations carry added weight given recent developments. OpenAI has since renegotiated its deal with Microsoft to bring its models and tools to AWS. The move came shortly after OpenAI told employees that its Microsoft agreement had “limited our ability to meet enterprises where they are — for many that’s [Amazon] Bedrock” — closely echoing the kind of public criticism Scott had warned about nearly seven years earlier.
Source: The Verge