Microsoft's multi-billion-dollar bet on OpenAI has received backlash from AI critics, claiming that the technology might be just a bubble waiting to burst. The controversial partnership has also raised concerns among investors, primarily due to a lack of a clear profitability path.
As you might know, a recent report suggested that OpenAI might have lost $11.5 billion chasing the AI hype, per Microsoft's financial report for the fiscal year ending June 30. It's still unclear whether OpenAI breaks even from its ChatGPT and LLM access fees revenue.
Despite pushback from critics to invest in OpenAI, including Microsoft co-founder Bill Gates, who claimed that it would be like setting billions of dollars ablaze, Satya Nadella moved forward with the plans. Admittedly, the partnership (arguably the best "tech bromance" in history) has been through a lot of tension, especially during OpenAI's planned evolution into a for-profit venture to avoid hostile takeovers and outsider interferences.
However, the companies recently renewed their vows under a new definitive agreement with a new clause, which dictates that OpenAI can only declare AGI once an independent expert panel has verified the claim.
More recently, OpenAI CEO Sam Altman revealed how Microsoft's early bet and investment in the company have played an instrumental role in its success in the ever-evolving AI landscape while referring to their partnership as "one of the great tech partnerships ever" (via Benzinga).
Certainly without Microsoft, and particularly Satya's early conviction, we would not have been able to do this. I don’t think there were a lot of other people that would have been willing to take that kind of a bet given what the world looked like at the time.
OpenAI CEO, Sam Altman
Altman admitted that OpenAI's journey began on shaky grounds, revealing that there was little certainty about the technology's trajectory and potential to evolve and thrive. "We just had a lot of conviction in this one idea of pushing on deep learning and trusting that if we could do that, we’d figure out ways to make wonderful products and create a lot of value," the executive added.
Bill Gates isn't the only leader in the tech industry who's openly expressed his concerns and fears about the Microsoft-OpenAI partnership. When the ChatGPT maker launched GPT-5, Tesla CEO and billionaire Elon Musk claimed that "OpenAI is going to eat Microsoft alive," further building upon his long-standing feud with OpenAI, Sam Altman, and Microsoft.
Even Salesforce CEO Marc Benioff predicted that Microsoft wouldn't use OpenAI's technology in the future after the company announced its $500 billion Stargate project to facilitate the construction of data centers across the United States, which consequently cost Microsoft its exclusive cloud provider status.
It'll be interesting to see what shape and direction the partnership takes, especially under the new agreement.
FAQ
Is Microsoft severing its ties from OpenAI?
Despite investor concern over plunging billions into OpenAI, Microsoft isn't cutting its ties with OpenAI. Instead, both parties have signed a new definitive agreement that clearly spells out the partnership and even clearly states that the ChatGPT maker can only declare AGI after an independent expert panel verifies the claim.
How much has Microsoft invest in OpenAI so far?
Despite a strong disapproval from Microsoft co-founder Bill Gates, the company, under the leadership of Satya Nadella, initially invested $1 billion in the ChatGPT maker. However, that figure has since skyrocketed to $13 billion, with Microsoft attributing its recent success and revenue growth to its AI investment and integration across its tech stack.
Is Microsoft just an "OpenAI reseller"?
Microsoft's AI efforts have been heavily criticized, and these claims come from Salesforce CEO Marc Benioff, who shared opinions like "Microsoft is an OpenAI reseller" for allegedly repackaging OpenAI and dropping it into Excel. He's even claimed that Copilot is just the new Microsoft Clippy that doesn't deliver any value.
Why does this matter now?
With AI reshaping industries, Microsoft’s early bet positioned it as a leader in cloud AI services, Copilot products, and enterprise adoption.
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