Microsoft has poured a whopping $13 billion into OpenAI, the powerhouse behind ChatGPT, making it one of the tech world’s biggest and buzziest partnerships. Yet, despite this strong bond, there are hints that their relationship might be on shaky ground. Earlier this year, due to an early embrace of AI throughout its technology suite, Microsoft briefly surpassed Apple and NVIDIA to become the most valuable company globally. This major investment in OpenAI was meant to push forward innovative advancements, and in return, Microsoft gains exclusive early access to next-generation AI models.
At the core of many Microsoft services, OpenAI’s groundbreaking tech plays a pivotal role. But, according to a new Reuters report, Microsoft is contemplating integrating new AI models into its 365 Copilot service that aren’t from OpenAI. The reason? The current models, like GPT-4, are reportedly too costly and slow for Microsoft’s enterprise clients, prompting the company to actively pursue cost-effective solutions, particularly for enterprise features like GitHub Copilot, and plan to share these savings with customers.
This development follows earlier whispers pointing to potential strains in the Microsoft-OpenAI partnership. There were talks of disagreements over their exclusivity agreement and the high costs of computing resources barely meeting OpenAI’s ambitious AI needs. OpenAI insiders have noted that Microsoft’s struggle to meet the necessary computing power might jeopardize its chance at reaching the prestigious AGI milestone, as other AI labs are rapidly evolving.
Microsoft’s Copilot 365, a significant part of its product arsenal, integrates with essential productivity tools such as PowerPoint and Word to help users quickly access information, and even condenses meetings and emails to boost productivity. However, recent reports show Microsoft facing hurdles with Copilot and advanced AI models, despite having early access to OpenAI’s tech. A top executive candidly called many Copilot tools “gimmicky,” revealing that the firm relies heavily on third-party vendors to ensure Copilot works efficiently across Microsoft 365. Feedback from some clients suggests that the AI tool’s performance is lacking around “75% of the time,” and the $30 per user per month cost seems steep to some.
On OpenAI’s side, there are efforts to nix a clause that would end its partnership with Microsoft upon reaching the elusive AGI benchmark. Sam Altman, OpenAI’s CEO, hinted that achieving AGI might happen sooner than expected with minimal societal disruption. An OpenAI tech employee even speculated that they might have already hit the AGI mark with the release of OpenAI o1.
As Microsoft evaluates its future, the company might be wise to hedge its bets on AI ventures, especially with rumors swirling about OpenAI’s potential bankruptcy, potentially facing $5 billion in losses over the next year. Microsoft CEO Satya Nadella has suggested that cutting ties with OpenAI might be inevitable once AGI is achieved, indicating that the company is keen on exploring new horizons in AI advancements.
