OpenAI’s relationship with Microsoft, its long-term investor and cloud partner, it has grown it’s getting harder over the years as a developer ChatGPT has grown a behemoth competitor.
But Microsoft executives have had reservations about sending additional funding to OpenAI since 2018 when it was a small, nonprofit research lab, according to email address of more than a dozen Microsoft executives, including CEO Satya Nadella, appeared in federal court on Thursday during Musk vs. Altman an experiment.
The emails show how Microsoft, at the time, faltered on what has since been regarded as one of the most successful corporate partnerships in technology history. Several Microsoft executives said in an email that their visits to OpenAI did not show any immediate success in developing general artificial intelligence. In 2017, a lot of OpenAI work was noticed building AI systems that can play video gameswhich showed early signs of success. But OpenAI needed five times more computing power than it was getting from Microsoft to develop the project.
Microsoft was concerned that not providing support would push OpenAI into the hands of Amazon, the dominant cloud computing provider at the time. About 18 months after the emails were sent, Microsoft announced a a massive investment of 1 billion dollars at OpenAI after the lab created a profitable unit that gave the tech giant the ability to generate $20 billion in profits.
Microsoft declined to comment.
Elon Musk’s lawyers released the emails to show Microsoft’s ongoing relationship with OpenAI. After Musk contacted Nadella, Microsoft in 2016 agreed to provide $60 million worth of cloud computing services to OpenAI at a significant discount. OpenAI used the service twice as fast as expected.
The email series began on August 11, 2017, with Nadella contacting OpenAI CEO Sam Altman to congratulate the lab for winning a video game competition using AI to imitate a human player. Ten days later, Altman responded seeking $300 million worth of Microsoft Azure cloud computing services.
“We can figure out how to finance some of it but not that much,” Altman wrote, seeking financial support and engineering support. “I think it will be the most interesting thing in the history of AI.”
Nadella asked four executives for their thoughts on how to respond three days later. Microsoft’s AI team saw “no value in getting involved,” according to a response from Jason Zander, Microsoft’s senior vice president, which also documented how other teams felt. His research team thought his own work was “superior,” while the public relations team didn’t like the idea of supporting a group pushing the idea of ”machines beating humans.” Ultimately, Zander suggested that Azure would benefit from partnering with Musk and Altman but that he wouldn’t want to “take a big shower,” or take a big financial loss, by doing so.
A subsequent analysis showed that Microsoft stood to lose about $150 million over several years if it offered the services Altman wanted, according to one email. “Unless he can help us map the direct impact of the Internet and OpenAI -> Microsoft’s business value, we will have to pass,” Zander wrote.
The conversation went dark for several months, but was revived on January 10, 2018, by an email to Nadella from Brett Tanzer—who signed his emails with “Brettt”—then director of Azure’s cloud division. Altman had told Tanzer that OpenAI could license its gaming AI to Microsoft’s Xbox video game division in exchange for “$35-50 million in Azure Credits.” But Xbox couldn’t generate much money. Microsoft planned to tell Altman there would be no more discounts after that March, according to Tanzer’s email.
