Microsoft’s concern about Google’s leadership drove investment in OpenAI

(Bloomberg) — Microsoft Corp.’s motivation to invest heavily in and partner with OpenAI came from a sense of falling behind Google, according to an internal email released Tuesday as part of the Justice Department’s antitrust case against the search giant.

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Software maker Windows’ chief technology officer Kevin Scott was “very, very concerned” when he looked at the AI ​​model training capability gap between Alphabet Inc.’s efforts and Microsoft’s, he wrote in a message of 2019 to CEO Satya. Nadella and co-founder Bill Gates. The exchange shows how the company’s top executives privately acknowledged that they lacked the infrastructure and development speed to catch up to the likes of Google’s OpenAI and DeepMind.

The email was released Tuesday night after media organizations including the New York Times and Bloomberg intervened in the historic antitrust lawsuit to push for greater public access. The US Department of Justice argued that OpenAI’s ChatGPT and other innovations could have been released years ago if Google had not monopolized the search market.

Scott, who also serves as executive vice president of artificial intelligence at Microsoft, noted that Google’s search product has improved in competitive metrics due to Alphabet’s advances in AI. The Microsoft executive wrote that he made a mistake in rejecting some of his competitors’ previous AI efforts.

“We are several years behind the competition in terms of machine learning scale,” Scott said in the email. Significant portions of the message, titled ‘Reflections on OpenAI’, remain redacted. Nadella endorsed Scott’s email, forwarding it to Chief Financial Officer Amy Hood and saying it explains “why I want us to do this.”

Read more: How Microsoft’s $13 billion bet made it a force in AI

Microsoft has invested more than $13 billion in its partnership and support for OpenAI, leveraging the startup’s generative AI technology to enhance its Bing search service, Edge web browser and, most notably, integrating an AI Copilot service into Windows. Nadella has elevated the AI ​​race to a priority at the company, also recruiting DeepMind co-founder Mustafa Suleyman to run its consumer AI business.

Nadella answered questions about the email when he testified at the trial last fall.

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“As it relates to research, we wanted to make sure we could think about innovation in the search category with” large language models like those developed by OpenAI, Nadella said. But he later added that “the investment was not made with a narrow focus on research alone.”

Microsoft and Google refused to make the email available when requested by reporters last year, saying it would reveal confidential business information. Media outlets pushed for its release, and Judge Amit Mehta last week ordered the companies to provide an edited version, as the content “sheds light on Google’s defense of Google’s and Microsoft’s relative investments in search ”.

Google and the Justice Department will present closing arguments in the case on Thursday and Friday. Judge Mehta is expected to issue his ruling later this year.

The case is US v Google, 20-cv-3010, US District Court, District of Columbia.

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