Musk v. Altman Evidence Shows What Microsoft Executives Thought of OpenAI

OpenAI’s relationship with Microsoft, its longtime investor and cloud partner, has become increasingly complicated over the years as the creator of ChatGPT has grown into a giant competitor.

But Microsoft executives had reservations about sending additional funds to OpenAI as early as 2018, when it was just a small nonprofit research lab, according to emails between more than a dozen Microsoft executives, including CEO Satya Nadella, presented in federal court Thursday. Musk vs. Altman trial.

The emails show how Microsoft, at the time, balked at what has since been considered one of the most successful corporate partnerships in tech history. Several Microsoft executives said in emails that their visits to OpenAI did not indicate any imminent advances in the development of artificial general intelligence. In 2017, much of OpenAI’s work focused on creating AI systems capable of playing video games, which showed early signs of success. But OpenAI needed five times more computing power than initially obtained from Microsoft to continue the project.

Microsoft feared that failing to provide support could push OpenAI into the arms of Amazon, the world’s leading cloud computing provider at the time. About 18 months after the emails were sent, Microsoft announced a historic $1 billion investment in OpenAI after the lab created a for-profit arm that provided the tech giant with the potential to generate a $20 billion return.

Microsoft declined to comment.

Elon Musk’s lawyers presented the emails to show the evolving relationship between Microsoft and OpenAI. After Musk contacted Nadella, Microsoft agreed in 2016 to provide OpenAI with cloud computing services worth $60 million at a heavily discounted price. OpenAI consumed services twice as fast as expected.

The email chain began on August 11, 2017 when Nadella contacted Sam Altman, CEO of OpenAI, to congratulate the lab on winning a video game competition using AI to imitate a human player. Ten days later, Altman responded by requesting $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 technical assistance. “I think it will be the most impressive thing in the history of AI.”

Nadella asked four lieutenants for their advice on how to respond three days later. Microsoft’s AI team saw “no value in engaging,” according to a response from Jason Zander, Microsoft’s executive vice president, which also documented how other teams felt. His research team thought his own work was “more advanced,” while the PR teams didn’t like the idea of ​​supporting a group pushing the idea of ​​“machines beating humans.” Ultimately, Zander suggested that Azure would benefit from teaming up with Musk and Altman, but that he wouldn’t want to “take a complete bath” or serious financial hardship by doing so.

Subsequent analysis showed that Microsoft stood to lose about $150 million over several years if it provided the services Altman wanted, according to an email. “Unless it can help us create a more direct network effect with OpenAI->Microsoft business value, we will eventually have to move on,” Zander wrote.

The thread remained dark for several months, but was revived on January 10, 2018 with an email to Nadella from Brett Tanzer, who signed his emails with “Brettt”, then director of the Azure cloud unit. Altman had told Tanzer that OpenAI could license its gaming AI to Microsoft’s Xbox video game division in exchange for “$35 million to $50 million in Azure credits.” But Xbox couldn’t commit that much money. Microsoft planned to tell Altman that there would be no more cuts after March, according to Tanzer’s email.