Satya Nadella didn’t want to hear it.

Last December, Peter Lee, who oversees Microsoft’s sprawling research efforts, was briefing Nadella, Microsoft’s CEO, and his deputies about a series of tests Microsoft had conducted of GPT-4, the then-unreleased new artificial intelligence large-language model built by OpenAI. Lee told Nadella Microsoft’s researchers were blown away by the model’s ability to understand conversational language and generate humanlike answers, and they believed it showed sparks of artificial general intelligence—capabilities on par with those of a human mind.

But Nadella abruptly cut off Lee midsentence, demanding to know how OpenAI had managed to surpass the capabilities of the AI project Microsoft’s 1,500-person research team had been working on for decades. “OpenAI built this with 250 people,” Nadella said, according to Lee, who is executive vice president and head of Microsoft Research. “Why do we have Microsoft Research at all?”