Microsoft Invested in OpenAI Due to Google Concerns, Emails Show

Microsoft's Satya Nadella and Bill Gates were 'very worried' about Google's AI progress


In 2019, Microsoft invested $1 billion in OpenAI because it was concerned that Google was far ahead in expanding its AI projects. An internal email titled “Thoughts on OpenAI,” exchanged between Microsoft’s CTO Kevin Scott, CEO Satya Nadella, and co-founder Bill Gates, sheds light on the discussions leading to the investment, which was later revealed when Microsoft announced its partnership with OpenAI. This email was made public on Tuesday as part of the ongoing US Justice Department antitrust case against Google.

“We are multiple years behind the competition in terms of machine learning scale,” Scott writes in his June 12th, 2019, email to Nadella and Gates. He explains that Microsoft engineers took six months to replicate Google’s BERT language model and train it because their infrastructure wasn’t ready for it.

Scott initially didn’t think much of AI projects at OpenAI and Google DeepMind when they were trying to outdo each other in game-playing, like Google DeepMind did with AlphaGo Zero. However, he changed his mind when they started focusing on natural language processing models. “As I dug in to try to understand where all of the capability gaps were between Google and us for model training, I got very, very worried,” Scott wrote.

Scott mentioned that Google’s early AI models gave it an edge over Bing. He also praised Google’s autocomplete in Gmail, saying it was impressively accurate in 2019.

Nadella shared Scott’s comments about OpenAI with Microsoft CFO Amy Hood, emphasizing his interest in the topic. Hood plays a crucial role in Microsoft’s leadership, focusing on financial goals and managing the company’s spending.

The email thread below has been heavily edited and seems to be a reply to either Nadella or Gates. Gates left the Microsoft board in 2020 amid an investigation into an affair with an employee, but he’s reportedly still involved with Microsoft’s relationship with OpenAI. It’s unclear who started the discussion about OpenAI in 2019, but Business Insider recently reported that Gates has been meeting with OpenAI regularly since 2016 and helped make a deal.

Microsoft has invested over $13 billion in OpenAI, integrating its models into Office apps, Bing, Edge, and even Windows. This investment has helped Microsoft become a leader in AI, a position it was worried about losing five years ago. Nadella has also made AI and security his top priorities for Microsoft in 2024 and beyond, showing that AI features in Microsoft products will continue to grow.

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