Emails Show that Google’s Concerns Were the Reason Behind Microsoft’s Investment in OpenAI

Microsoft was “very worried” that Google was years ahead of it when it came to stepping up its AI efforts, so in 2019 it spent $1 billion in OpenAI. The CEO Satya Nadella, co-founder Bill Gates, and Microsoft CTO Kevin Scott had some high-level conversations about an investment potential in the months prior to Microsoft announcing the alliance, according to an internal email titled “Thoughts on OpenAI.”

According to sources, the email was made public on Tuesday as a part of the ongoing antitrust prosecution against Google by the US Justice Department.

“We are multiple years behind the competition in terms of machine learning scale,” Scott says in an email to Gates and Nadella dated June 12, 2019. He describes how Microsoft programmers had to train their replica of Google’s BERT language model over the course of six months “because our infrastructure wasn’t up to the task.”

When Google DeepMind and OpenAI were pitting their AI prowess against one another to determine who “could achieve the most impressive game-playing stunt,” Scott claims he was first contemptuous of the latter’s AlphaGo Zero demonstrations. When developments headed in the direction of natural language processing models, Scott was soon even more impressed. Scott noted, “I got very, very worried as I dug in to try to understand where all of the capability gaps were between Google and us for model training.”

Scott stated that Google’s autocomplete features in Gmail were “getting scarily good” in 2019 and that some of the company’s early AI models gave it an advantage over Bing.

In response, Nadella forwarded Scott’s ideas on OpenAI to Microsoft CFO Amy Hood, saying that this is “why I want to do this.” As a crucial member of Microsoft’s senior leadership group, Hood is in charge of managing the company’s financial objectives and routinely monitoring Microsoft’s expenditures.

The substantially edited email conversation seems to be a response to Gates or Nadella. Despite leaving the Microsoft board in 2020 due to an infidelity probe, Gates is said to have played a significant role in Microsoft’s continued partnership with OpenAI. Although it’s unclear from this internal email who started the conversation regarding OpenAI in 2019, a source claims that Gates helped arrange the agreement by attending regular meetings with OpenAI starting in 2016.

Microsoft has now made over $13 billion in investments in OpenAI, integrating its models into Edge, Bing, Office programs, and even the Windows operating system. Instead of lagging behind as it previously feared five years ago, it has helped Microsoft become more of an AI leader. Nadella also recently declared that security and artificial intelligence (AI) would be Microsoft’s top priorities for 2024 and beyond, indicating that the company won’t be slowing down the introduction of AI features in its products.

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