OpenAI and Microsoft Are Partners, Until They Vie for the Same Customers Read More

From left: Peter Thiel, Vinod Khosla, Tim Cook, Satya Nadella, Sam Altman, Mark Zuckerberg, Sundar Pichai and Marc Benioff. Photos by Bloomberg, Getty. Art by Mike Sullivan.
Jan. 11, 2023 8:17 AM PST

Three years ago, as Microsoft sought to overtake Amazon and Google in cloud computing and artificial intelligence, the company made a major move. It invested $1 billion into a project originally co-founded by Elon Musk, former Y Combinator president Sam Altman and other tech leaders to create artificial general intelligence—software that could do anything humans can.

The founders of the effort, known as OpenAI, saw themselves as a rival to profit-minting AI tech kings like Google and vowed to prevent such powerful technology from ending up in the hands of monopolies. But Altman, who later became CEO, realized that structure made it harder to raise the war chest OpenAI needed to train machine-learning models. Enter Microsoft.

Years later, the relationship between Microsoft and OpenAI has grown deeper and more complicated. Their financial fates and technology are increasingly entwined. Now the tech industry is watching the high-profile partnership as Silicon Valley looks to turn a new generation of AI tools into the next big gold mine. And a who’s who of financiers, from Sand Hill Road’s Sequoia Capital to Wall Street’s Tiger Global Management, has also jumped at the chance to own a piece of the commercial arm of OpenAI, last valued at around $20 billion in 2021.

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