- A recent NYT report reveals that OpenAI's relationship with Microsoft is strained. OpenAI views Microsoft as a competitor.
- According to the report, Microsoft AI chief Mustafa Suleyman yelled at an OpenAI employee over the delayed transfer of AI technologies.
- Besides that, OpenAI is seeking greater independence from Microsoft and looking to leverage the AGI clause, to stop sharing AI advancements with Microsoft.
In 2019, OpenAI partnered with Microsoft in a multi-year deal that would change the landscape of the AI industry. Since then, Microsoft has invested billions in the hot AI startup and supplied computing resources through its Azure cloud platform. In 2023, OpenAI CEO Sam Altman said its partnership with Microsoft is the “best bromance in tech.”
However, a recent report by The New York Times reveals that the OpenAI-Microsoft partnership is starting to show some cracks. Tension is flaring up between the two companies as OpenAI is reportedly delaying the transfer of new AI technologies to Microsoft.
The NYT reports that during a recent video call, Microsoft’s AI chief Mustafa Suleyman yelled at an OpenAI employee. He believed that OpenAI was not providing new AI advancements to Microsoft as quickly as the company expected. Meanwhile, some OpenAI employees took offense when Microsoft’s engineers downloaded crucial OpenAI software without following the protocols.
Mustafa Suleyman Has Been a Controversial Manager
Mustafa Suleyman was the co-founder of DeepMind (now Google DeepMind) and headed Applied AI at the company. In 2019, Suleyman was accused of bullying employees at DeepMind. In light of the accusation, Google hired an external law firm to investigate the issue, reported The Wall Street Journal. After the investigation was over, Suleyman was placed on a leave of absence.
However, in late 2019, Google promoted Suleyman to the influential role of Vice President of AI Policy at Google. In 2021, Business Insider revealed an internal memo from DeepMind that said, “We found Mustafa’s management style fell short of the standards we expect…”
In another report, one of the former DeepMind employees revealed, “He used to say, ‘I crush people’“, referring to Suleyman’s behavior. Another former employee said, “He had a habit of just flying off the handle out of nowhere.“
Later, in a statement, Suleyman apologized and said, “I drove people too hard and at times my management style was not constructive… I apologise unequivocally to those who were affected by my past behaviour.”
In 2022, Suleyman finally quit Google and started his own startup, Inflection AI, popular for the Pi chatbot, a personal AI designed to be supportive.
Fast forward to 2024, and Microsoft hired Mustafa Suleyman to lead its AI efforts in the consumer space. The appointment, as per the report, angered Sam Altman and other executives at OpenAI.
Shortly after that, the head of Bing Search, Mikhail Parakhin left Microsoft who was overseeing AI integration into Bing and Copilot. And now, Microsoft’s top AI researcher, Sébastien Bubeck has left Microsoft to join OpenAI, who was just recently building a larger Phi model for Microsoft.
OpenAI is Re-Negotiating Its Contract with Microsoft
Besides Mustafa Suleyman’s odd behavior, OpenAI is reportedly re-negotiating its contract with Microsoft. The Redmond giant charges OpenAI for using its Azure cloud infrastructure to train AI models and provides services for ChatGPT and its API.
OpenAI wants Microsoft to reduce the computing cost or allow it to purchase resources from other companies. The contract says that OpenAI must use Azure for all its services. In June this year, Microsoft finally relented and allowed OpenAI to sign a deal with Oracle for additional resources.
Apart from that, OpenAI is looking to expand its investor base beyond Microsoft. Recently, OpenAI raised $6.6 billion from Thrive Capital, Nvidia, Khosla Ventures, MGX, and Microsoft. Apple didn’t join the funding round at the last moment.
Finally, and most interestingly, OpenAI has a strategic contract with Microsoft that says that once OpenAI achieves AGI (Artificial General Intelligence), Microsoft will lose access to OpenAI’s technologies. And it’s OpenAI’s board that will decide when AGI has been achieved. Now, executives at OpenAI view this clause as leverage to re-negotiate with Microsoft and get a favorable contract.
The development suggests that OpenAI is seeking greater independence from Microsoft and wants to have control over its future technology. How will this pan out, we don’t know yet, but there is a clear sign of discontent between OpenAI and Microsoft.
