Microsoft has invested heavily in OpenAI, pouring $13 billion into the maker of ChatGPT and fostering one of tech’s most notable partnerships. Yet, things might not be as harmonious as they seem. Earlier this year, Microsoft’s strategic move to integrate AI throughout its technology helped it briefly eclipse Apple and NVIDIA as the most valuable company globally. This investment in OpenAI has allowed Microsoft to access groundbreaking AI models before others.
Most Microsoft products now draw on OpenAI’s sophisticated technology. Yet, a Reuters report suggests Microsoft may be pursuing other avenues for their AI needs, particularly in its Microsoft 365 Copilot service. Intriguingly, these new AI models might not come from OpenAI’s catalog.
The report outlines potential reasons for this shift. It seems Microsoft’s decision to explore alternatives to OpenAI’s models, like GPT-4, stems partly from high costs and performance issues that do not align with the demands of their enterprise clients. Microsoft is aggressively seeking cost-effective solutions for enterprise-level features, such as its Github Copilot, aiming to share these savings with customers.
This news emerged amidst earlier claims of a cooling relationship between Microsoft and OpenAI, with whispers of tension over their exclusive partnership and the expensive computing resources required to support OpenAI’s advancements.
Within OpenAI, there is concern that Microsoft’s struggle to meet computing demands could jeopardize the ambition to achieve the AGI (Artificial General Intelligence) benchmark. This is especially pressing as rival AI labs rapidly advance.
As you might know, Microsoft’s Copilot 365 is integrated into its suite of productivity tools like PowerPoint and Word, sifting through data to help users access information quickly. It’s designed to enhance productivity by summarizing meetings and emails.
Despite early access to OpenAI’s technology, Microsoft has faced hurdles with Copilot 365. A senior executive at Microsoft even labeled many Copilot AI tools as “gimmicky.” The company currently leans heavily on third-party suppliers to ensure Copilot’s functionality across platforms, including Microsoft 365. Some users have even reported that the AI tool doesn’t perform reliably 75% of the time, making the $30 per user monthly charge seem steep.
The narrative takes another twist with OpenAI reportedly aiming to cut a stringent contract clause that obligates it to part ways with Microsoft upon reaching the AGI milestone. Interestingly, Sam Altman, OpenAI’s CEO, hinted that AGI might be closer than anticipated, likely arriving with minimal societal upheaval. Additionally, a technical staff member from OpenAI suggested that AGI might already be within reach following the launch of OpenAI o1.
Given these developments, Microsoft might be wise to diversify its AI investments. Strategically splitting its risks seems prudent, particularly in light of speculation about OpenAI’s potential financial troubles, which could amount to losses reaching $5 billion over a year. Microsoft CEO Satya Nadella has hinted that ending their partnership post-AGI achievement might be a sensible next step.
