June 19, 2024
How Microsoft’s Satya Nadella kept the ‘best bromance in tech’ alive

Just two weeks ago, Microsoft’s Satya Nadella stood on stage next to OpenAI’s Sam Altman at a conference for start-ups in a former concert hall in San Francisco. Both wore black jeans, Mr Altman in an army-green shirt and Mr Nadella in navy casuals.

“we love you guys!” Mr. Nadella said, turning to Mr. Altman.

“Oh,” Mr. Altman replied.

Mr. Altman has called OpenAI’s relationship with Microsoft “the best bromance in technology.” Since 2019, companies have worked together to create advanced artificial intelligence systems that they believe could be the most significant technological innovation in a generation, and Microsoft has invested $13 billion in OpenAI Have invested. Together, they planned to take on Google’s Hammerlocke on the Internet.

That relationship is being tested. On Friday, when the board of the nonprofit that controls OpenAI ousted Mr. Altman, the company’s co-founder and chief executive, Microsoft was warned just minutes before the move was made public.

Over the past three days, Mr Nadella has made it clear that he is not going to walk away from the partnership – but OpenAI’s future may be in doubt. And what could have been an embarrassing moment for Mr. Nadella and his company turned into a display of corporate strength that has stunned industry insiders.

Since OpenAI released its ChatGPIT chatbot about a year ago, artificial intelligence has captured the public’s imagination, with hopes that it could be used to perform important tasks like drug research or help teach children. Is. This could lead to job loss or even autonomous war. And whoever builds it can control what some computer scientists believe is one of the most important new technologies since the steam engine.

On Sunday night, when OpenAI’s board of directors said it stood by its decision to oust Mr. Altman, Microsoft moved to appoint Mr. Altman and Greg Brockman, who served as OpenAI’s chairman following the board’s decision. Left the post as Mr. Nadella said the two would run a new AI research lab for Microsoft, and most of OpenAI’s more than 700 employees have said they would walk out and offer their services to Microsoft if Mr. Altman was not reinstated. .

“We look forward to moving quickly to provide them with the resources they need to succeed,” Mr Nadella said. Said On X, formerly on Twitter.

Microsoft and OpenAI declined to comment.

Mr. Nadella’s aggressive move against OpenAI was a surprising capstone to a wild weekend. It highlighted a fault line between tech industry leaders focused on turning AI into a huge business and an increasingly influential part of the tech community that believes AI could be dangerous.

A key member of OpenAI’s board believed that Mr. Altman was moving too fast to expand his company while not paying enough attention to the security of AI, out of concern that it could lead to job losses. With the belief that it could be a threat to humanity.

Although Mr. Nadella and his company tried unsuccessfully over the weekend to help resolve OpenAI’s management dysfunction, he had more influence on the San Francisco start-up than many realized.

OpenAI likely saw only a portion of the $13 billion Microsoft committed because it was to be paid over time — though the exact terms of the deal were unclear. Additionally, Microsoft signed an agreement that gave it copies of OpenAI’s most cutting-edge technology and has been working with it for over a year. Microsoft is providing OpenAI with the huge computer power needed to build its AI

With all this, Mr. Nadella could rebuild OpenAI inside Microsoft and not waste much time or money. It is also not out of the question that OpenAI’s board could come under pressure from staff to bring Mr. Altman and his colleagues back with significant changes to the board. Mr. Nadella could also stay with him.

“It seems like you’ve forgotten the nonsense that happened in four days — Sam is still Sam, and he’s running the show,” said S., a former Microsoft executive at Madrona Venture Group. said Somsegar, who is now in touch with Mr Nadella. “No matter what happens here, Microsoft will ultimately be the winner.”

For Microsoft, the explosion in OpenAI presents a major risk to its plans to incorporate AI into everything it does. Microsoft owns a 49 percent stake in OpenAI, but has no direct influence on its board of directors.

But as a hedge against not having clear control over OpenAI, Microsoft negotiated contracts that gave it access to OpenAI’s intellectual property, copies of the source code for its major systems as well as the results of the systems after they were trained. Gave the right to “wait” to direct. on the data, according to three people familiar with the deal who were not authorized to discuss it publicly.

“This is core security for Microsoft,” Mr. Somsegar said.

Mr Nadella moved in immediately on Friday afternoon to speak to OpenAI’s board in an attempt to defuse the tense situation. He said Microsoft will continue to work with OpenAI, but it’s unclear what will be left of the company.

Microsoft investors, who had feared that management missteps at OpenAI would put Microsoft in a difficult position, applauded Mr Nadella’s move. Microsoft’s share price rose more than 2 percent to a record high on Monday.

Mr Nadella and his technology chief Kevin Scott had close ties to Mr Altman and Mr Brockman. Mr Nadella and Mr Altman have known each other since 2018, when they met at the high-wattage Allen & Company conference in Sun Valley, Idaho. At the time, OpenAI was a non-profit research laboratory dedicated to building safe artificial general intelligence.

But OpenAI required large amounts of expensive computing power, so to attract investors, it created a for-profit company under the control of a non-profit board of directors.

Since its first $1 billion investment in OpenAI in 2019, Microsoft has treated the much smaller company as a tech incubator. OpenAI was focused solely on AI – like a pack of wolves, as a former Microsoft executive described it – while Microsoft had to manage a range of businesses from cloud computing and software to computer games.

OpenAI is now finding that it needs Microsoft more than it needs OpenAI. Microsoft developed and provided the vast computing power that runs OpenAI, and negotiated a series of legal and commercial deals to protect it if something goes wrong.

Microsoft had spent several months negotiating a $10 billion investment that closed in January, and worked to keep its ownership stake below 50 percent. Among other things, it was worried that having majority control would expose it to antitrust investigations, according to three people familiar with the deal. And Mr Nadella refrained from interfering in OpenAI’s management.

The chaotic weekend showed they don’t need a seat on the board to wield power.

Reporting was contributed by Cade Metz, Erin Griffith, Mike Isaac and Trip Mickle from San Francisco.

Source: www.nytimes.com

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