OpenAI coverage of Microsoft, its longtime investor and cloud partner, has become increasingly complicated over the years as the creator of ChatGPT has become a giant competitor.
However, Microsoft executives said they had reservations about sending additional funds to OpenAI back in 2018, when it was just a petite nonprofit research lab. emails between a dozen Microsoft executives, including CEO Satya Nadella, was shown Thursday in federal court during a trial Musk v. Altman test.
The emails show Microsoft’s hesitation at the time in what has since been considered one of the most successful corporate partnerships in technology history. Several Microsoft executives said in emails that their visits to OpenAI did not reveal any immediate breakthroughs in the development of artificial general intelligence. In 2017, much of OpenAI’s work focused on building artificial intelligence systems that could recreate video games, which showed early signs of success. To continue the project, however, OpenAI needed five times the computing power it had originally provided to Microsoft.
Microsoft feared that the lack of support could push OpenAI into the arms of Amazon, then the world’s dominant cloud service provider. About 18 months after the emails were sent, Microsoft announced that: a landmark $1 billion investment at OpenAI after the lab created a for-profit division that gave the tech giant the potential to generate a $20 billion return.
Microsoft declined to comment.
Elon Musk’s lawyers produced emails to show Microsoft’s evolving relationship with OpenAI. After Musk contacted Nadella, Microsoft in 2016 agreed to provide $60 million in cloud computing services to OpenAI at a significant discount. OpenAI used services twice as rapid as expected.
The email chain began on August 11, 2017, when Nadella contacted OpenAI CEO Sam Altman to congratulate the lab on winning a competition for video games that employ artificial intelligence to mimic a human player. Ten days later, Altman responded by asking for $300 million in Microsoft Azure cloud computing services.
“We could figure out how to fund some of it, but not that much,” Altman wrote, apparently seeking financial and engineering lend a hand. “I think it will be the most impressive thing in the history of artificial intelligence.”
Three days later, Nadella asked four lieutenants for their opinion on the response. Microsoft’s artificial intelligence team “didn’t see any value in getting involved,” according to a response from Jason Zander, Microsoft’s executive vice president. This response also documented the feelings of other teams. Her research team thought its own work was “more advanced,” while its public relations teams didn’t like the idea of supporting a group promoting the idea of ”machines beating people.” Ultimately, Zander suggested that Azure would benefit from working with Musk and Altman, but would not want to “take a complete bath” or avoid a gigantic financial hit by doing so.
Subsequent analysis showed that, according to one email, Microsoft could lose about $150 million within a few years if it provided the services Altman wanted. “If it doesn’t help us achieve a more direct network effect with OpenAI -> Microsoft Business Value, we will have to pass the test,” Zander wrote.
The thread disappeared for several months but was revived on January 10, 2018, with an email to Nadella from Brett Tanzer, who signed his emails with “Brett” – then the director of Azure’s cloud unit. Altman told Tanzer that OpenAI could license gaming AI to Microsoft’s Xbox video game division in exchange for “$35 million to $50 million in Azure credits.” But Xbox couldn’t allocate that much money. Microsoft planned to tell Altman there would be no more discounts after March, according to Tanzer’s email.