Microsoft CEO says OpenAI alliance changing but remains strong

Microsoft Corp. Chief Executive Officer Satya Nadella said his company's crucial partnership with OpenAI is changing, but remains strong.
'Any company that has gone from being a research lab to one of the most successful product companies of this age, obviously things have to change for them and for us and in the context of the partnership,' Nadella said in an interview on the The Circuit with Emily Chang.
The world's largest software maker is seen as a leader in commercializing AI due to its relationship with, and $13.75 billion investment in, the ChatGPT maker. Still, there have been signs of friction between the companies as each launches competing products and seeks out additional partners.
Nadella noted that OpenAI is Microsoft's largest infrastructure customer and said his company is 'thrilled' to have access to the AI powerhouse's technology. 'Having that multifaceted partnership is what we are really focused on,' he said. 'Why would any one of us want to go upset that?'
The current contract continues through 2030, but a revision earlier this year allows OpenAI to rent computing power from other providers to train AI models. 'I hope that for decades to come, Microsoft and OpenAI will be partnered in variety of different ways,' Nadella said. 'Will they have other partners? Absolutely. Will we have other partners? Absolutely.'
In a previous episode of The Circuit, OpenAI CEO Sam Altman said, 'We do get a lot of great stuff from Microsoft, but I think this is more than any one company can deliver.' To secure more computing for its power-hungry AI models, OpenAI has joined forces with Oracle Corp., SoftBank Group Corp. and others on an AI infrastructure effort called Stargate.
Still, 'Microsoft will do a lot of compute for us, a lot, a lot,' Altman said. 'We're very happy about that.'
Microsoft, which is celebrating its 50th anniversary this year, has been weaving AI tools into its suite of business applications — an effort designed to boost the company's share of the global market for cloud services.
Nadella also is keen to use AI to reboot Microsoft's consumer business, which has long struggled against its peers. To accelerate the process, he recruited DeepMind co-founder Mustafa Suleyman last year to create an AI-focused consumer franchise. Suleyman has pledged to create emotionally intelligent assistants that can be tailored to users' individual needs.
'The number-one priority for us is that we have to produce beautiful, elegant consumer products that regular young people love,' Suleyman said an interview. 'And that is not the way that people currently think of Microsoft products today.'
Microsoft's consumer assistant, dubbed Copilot, has gained some traction but is up against steep competition, most notably from OpenAI. Last month, ChatGPT was downloaded 105 million times between Apple and Android mobile phones, roughly 20 times the number of consumer Copilot downloads, according to research firm Sensor Tower.
Nadella points out that because Microsoft provides much of OpenAI's computing, his company makes money every time ChatGPT is used. 'Every day that ChatGPT succeeds is a fantastic day for Microsoft,' he said.
This episode of The Circuit With Emily Chang premiers at 8 a.m. in New York on the Bloomberg app and Bloomberg.com. It appears at 6 p.m. on Bloomberg Television. Check out The Circuit podcast for extended conversations.
First Published Date: 06 Jun, 10:42 IST

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