Microsoft's Investment in OpenAI Was Sparked by Fears of Google's AI Dominance: Report

By Jace Dela Cruz

May 01, 2024 01:45 AM EDT

FRANCE-TECHNOLOGY-IT-AI — This picture taken on January 23, 2023 in Toulouse, southwestern France, shows screens displaying the logos of Microsoft and OpenAI.
(Photo : LIONEL BONAVENTURE/AFP via Getty Images)

Microsoft's decision to invest in and partner with OpenAI stemmed from concerns about lagging behind Google in AI capabilities, according to an internal email disclosed in the Justice Department's antitrust case against Google.

Microsoft's Fears Lagging Behind Google

In the email, Microsoft's Chief Technology Officer, Kevin Scott, expressed deep concern to CEO Satya Nadella and co-founder Bill Gates about the significant gap in AI model-training capabilities between Google's efforts and Microsoft's.

Scott admitted that Microsoft lacked the infrastructure and development speed to keep up with companies like OpenAI and Google's DeepMind.

According to Bloomberg, the Justice Department said that Google's dominance in the search market may have delayed the release of technologies like OpenAI's ChatGPT.

Scott highlighted Google's AI advancements, acknowledging that their search product had significantly improved due to AI progress. He admitted to underestimating competitors' earlier AI efforts, noting that Microsoft is lagging behind in terms of machine learning scale.

Microsoft's Partnership with OpenAI

Microsoft has committed over $13 billion to its partnership with OpenAI, leveraging its generative AI technology to enhance various services. Nadella has prioritized the AI race within Microsoft, hiring Mustafa Suleyman, co-founder of DeepMind, to lead the consumer AI business.

During testimony last fall, Nadella addressed questions related to the email, emphasizing the importance of innovation in the search category using large language models like those created by OpenAI. However, he clarified that the investment was not solely focused on search.

Judge Amit Mehta ordered the release of the email to shed light on Google's defense regarding investments in search relative to Microsoft. Closing arguments in the antitrust case are expected to take place this week, and a decision is anticipated later this year.