Microsoft CEO Satya Nadella Reveals Bill Gates’ Skepticism Over OpenAI Investment

Microsoft has secured nearly 27% stake in OpenAI, as the AI giant transitioned to a for-profit model. While the partnership has flourished with the revised agreement, Microsoft doesn’t hold intellectual property (IP) rights over OpenAI’s consumer hardware. That’s about recent development.

However, the partnership between the two tech giants dates back to 2019, when Microsoft first invested $1 billion in the then-startup AI lab. However, according to CEO Satya Nadella, securing the deal was far from simple.

From the outside, it might have looked like a straightforward investment. But, behind the scenes, convincing the board to approve the deal posed a significant challenge.

“Even at Microsoft, you kind of got to have to get a board approval to just go throw a billion dollars out there,” Nadella said in a recent TPBN interview. “But I must say it was not that hard to convince anyone that this is an important area and it’s going to be risky.” He added

Adding to that, Bill Gates, Microsoft’s co-founder, reportedly expressed was quite skeptical about the investment. Nadella shared that Gates warned him, “Yeah, you’re going to burn this billion dollars,” primarily because OpenAI operated as a nonprofit at the time and its long-term viability was unproven.

Despite the warning, Nadella and his team convinced of the potential in AI and its applications for Microsoft’s ecosystem. Reflecting on the decision, Nadella added, “I didn’t put in a billion dollars saying, ‘Oh yeah, this is going to be a hundred bagger.’ We kind of had a little bit of high risk tolerance, and we said we want to go and give this a shot.”

Looking at that decision now, the calculated risk has since paid off significantly, as OpenAI-Microsoft partnership is seen as an example in the AI industry these days, and rightly so. Microsoft’s partnership with OpenAI is now valued at $13.5 billion and has fueled major products such as ChatGPT, Microsoft 365 Copilot, and other AI-powered tools across the company.

via: Windows Central