Tom Dotan
Appearances
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
So I think as far as that goes, it's a recognition that we're in a totally different era when it comes to the amount of resources and money that it takes to build these sort of things.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
I think what's interesting that Satya brought up in a TV interview is that there's a bit of a divergence between these two companies in terms of their priorities and ambitions, because OpenAI is out there trying to build technologies what they call artificial general intelligence, or an AI that has the same level of smarts and capabilities as a human. And that's not really Microsoft's goal at all.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
They want to build software and AI that can help people create Word documents faster and Excel spreadsheets and write marketing emails and make you a more efficient worker. And the more that OpenAI consumes these sort of resources and is trying to build models at this enormous scale, Microsoft is kind of diverging from that because they're out there to get a return on their investment.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
They need to make real revenue from this.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Yeah, it's too soon to make that call. And I think it depends on what splitting up really means. I would find it hard to believe that there is a future where Microsoft and OpenAI are just like on non-speaking terms. That they're just, you know, in completely different worlds.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
And there's so much about what Microsoft does right now in terms of the software they build that is rely on an OpenAI software. There's too much history in that relationship, you know?
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
To go from that to one of the biggest announcements in OpenAI's history and Satya Nadella is not there is like pretty striking.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
His event at the White House was alongside the leaders of three leading artificial intelligence companies that are committing billions into a joint venture called Stargate.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Stargate will build data centers and help generate electricity to support AI. A $500 billion private venture to focus on AI.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
To this point, OpenAI had been actually using Google as its technology provider, and Microsoft kind of was interested in being their provider. And so the next year, in 2019, OpenAI gets a $1 billion investment from Microsoft.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
And it kind of kicks off the beginning of this multi-year and like multi-billion dollar invested relationship between these companies.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
And then from the Microsoft side of things, they get exclusive early access to their software that gets built. So when something like ChatGPT gets built, Microsoft gets a relatively early look at it. Microsoft can tweak it and build it into their own products and, you know, just generally get exclusive access to that company's intellectual property.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
And so OpenAI over the years would continually ask for more resources for Microsoft. And Microsoft, they have their own projects too that they're building. They have software that needs cloud computing. And from the Microsoft point of view, they were giving them everything that they could.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
They were pulling chips from other projects and giving them to OpenAI so they could train all of their models. But from OpenAI's perspective, they just weren't getting enough.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
OpenAI would say, you're not giving us enough resources. And frankly, we'd like to take our business elsewhere. We'd like to use other cloud computing platforms that will give us enough resources. And Microsoft would come back to them and say, That's a violation of our exclusivity agreement. You guys can't bring your business elsewhere.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
And then OpenAI would respond and say, well, our agreement is that you guys give us enough resources to train our software, so you're the ones who are in violation of the agreement. And these negotiations would happen on and off over almost the entirety of their relationship.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Satya plays a huge role in getting Sam reinstated. He really wanted him back in control at that company. And so that's an interesting moment because in a lot of ways that kind of cemented the strength of the relationship between those two personally.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
This was clearly a big deal for all the involved people. The image of all these guys in the White House talking about this and the enormous amounts of money that they were planning to raise and deploy in service of this project. I don't know. It was a whole to do.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
So over the last couple of months of 2024, they were in talks to renegotiate their contract. And OpenAI kind of, it would reopen this perpetual can of worms of, are they getting enough from Microsoft?
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Yeah, yeah, basically to build multiple data centers. And there's a lot of vagueness right now. But, you know, there's also the infrastructure around the data centers, like bringing, you know, piping in the power that allow these things to work. I assume that's also going to be part of the cost. But it's all in service, yes, of these data centers.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
It was announced at the White House because they wanted to announce it as close as possible to the beginning of Trump's administration. And you saw Ellison, Masayoshi Son, and Altman all individually and specifically giving Trump and the administration credit for this being able to happen. We wouldn't have been able to do it without you, Trump. was kind of the theme of this whole thing.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
I think there's a lot of regulation that still needs to be ironed out when it comes to AI. And I think all these companies want to have a hand in writing that regulation. And the closer you can get to Trump and, you know, kind of butter him up is like a good move for them.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Yeah, I don't know who you're talking about there.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Not pictured, not up there talking in front of the press was Microsoft. And the CEO, Satya Nadella, was thousands of miles away in Davos for the World Economic Forum.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
It's so funny to me because sometimes as a reporter, you work really hard to find sources familiar with the matter to let you know what these guys are really thinking. And sometimes they just tweet it out. And that's kind of what we're getting here. So a few hours after the Stargate announcement, Satya was asked about it on a TV interview. And his line was basically like,
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Look, this $100 billion thing, I don't really know about that. All I know is the $80 billion that we have pledged for our AI infrastructure, I'm good for my $80 billion.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
I think it's a fair interpretation. And again, it gets even messier because Elon has been hate tweeting or hate posting about Stargate. And in one of them, Satya responds with like the crying, laughing emoji and basically says, like, we're not here just to hype up AI. We're here to build software and products that actually benefit people and make their lives better.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
And it's hard not to see that again as at least a little bit of a shot at Sam, who is kind of getting labeled as sort of a hype man when it comes to AI. And so, yeah, it seemed like in that particular exchange, both Elon and Satya were kind of on the same side and sort of clowning on Sam.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
The agreement was that basically OpenAI will continue to come to Microsoft when they have requests for more data center capacity. The difference is that now, if Microsoft decides it doesn't want to build the new capacity that OpenAI is requesting, OpenAI is now allowed to take that request elsewhere.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Yes, it is an open relationship now, more so than it's really ever been.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Microsoft is the sugar daddy of, so to speak, of OpenAI. They have poured more money by a huge margin than anyone else into this company. And Sam Altman appears at almost every Microsoft event. Anytime they're rolling out a giant new piece of software that involves OpenAI's products in there, or they just generally have a big event, Sam and Satya will usually be there on stage.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Sure. If that's the direction you want to go with it, then yeah, I think you could say these guys are in some sort of a poly situation.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
I mean, I think really important. I think they weren't getting what they needed from Microsoft. Microsoft was not building data centers at the speed and rate that they wanted. And so they needed to take matters into their own hands. And if they kind of have way more control over the construction of these data centers, then yeah, I think it's like, I think it's essential to that vision.
The Journal.
The Unraveling of OpenAI and Microsoft's Bromance
Well, I guess things have grown a lot since Microsoft and OpenAI first began their relationship. And the level of resources that a company like OpenAI needs is kind of at an unprecedented level or just a hard-to-predict level than it probably was in 2019.