(Bloomberg) — When President Donald Trump joined tech executives on Tuesday to tout a multibillion-dollar artificial intelligence project led in part by OpenAI, one question sprang to mind: Where’s Microsoft Corp.?
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Despite investing almost $14 billion in OpenAI and using the startup’s AI models for its next-generation cloud services, Microsoft was mentioned only as a technology partner in a joint venture called Stargate launched by OpenAI, SoftBank Group Corp. and Oracle Corp. Then, in a blog post, the software giant said OpenAI could use rival cloud services to train and run its AI models with Microsoft’s permission, watering down an exclusivity contract.
The flurry of announcements prompted renewed speculation that the Microsoft-OpenAI relationship has frayed somewhat, although each party currently has more to gain together than apart. But Microsoft has become less willing to spend even more money financing the computing power OpenAI says it needs to retain a lead in artificial intelligence.
In 2023, Microsoft was close to a deal to invest tens of billions of additional dollars in OpenAI, according to people familiar with the situation. At the time, Altman was talking to Microsoft about helping fund a massive expansion of AI infrastructure with investors in Asia and the Mideast, the people said. Any Microsoft investment would likely have furthered those ambitions.
Then Sam Altman, the startup’s chief executive officer, was briefly fired, exposing instability at the heart of OpenAI. Altman was reinstalled as CEO, but the upheaval prompted Microsoft to abandon plans to invest more money, said one of the people, who requested anonymity to discuss private negotiations. Altman’s infrastructure plans have since changed several times, but Microsoft CEO Satya Nadella had lost enthusiasm for contributing significant sums.
The New York Times previously reported Microsoft’s planned investment in OpenAI.
Microsoft did pump $750 million into OpenAI’s most recent $6.6 billion funding round. But its refusal to make a larger commitment prompted Altman to look for other partners and to chafe against a contractual exclusivity provision that required OpenAI to get all of its cloud capacity from Microsoft through 2030.
