2017-2018 Microsoft Emails on OpenAI Funding Shown in Musk v. Altman Trial

Emails between more than a dozen Microsoft executives including CEO Satya Nadella dating back to 2018 were shown in federal court on Thursday during the Musk v. Altman trial. Wired reported that the messages illustrate how leaders at the tech giant were skeptical of further funding OpenAI but wary of pushing the lab into the arms of Amazon.

The email chain kicked off on August 11, 2017 with Satya Nadella reaching out to OpenAI CEO Sam Altman to congratulate the lab on winning a video game competition. In 2017 much of OpenAI’s work was focused on building AI systems that could play video games. Ten days after August 11 2017, Sam Altman responded seeking $300 million worth of Microsoft Azure cloud computing services.

“We could figure how to fund some of it but not that much. I think it will be the most impressive thing yet in the history of AI,” Sam Altman wrote to Satya Nadella. Three days after Altman’s request, Satya Nadella asked four lieutenants for their input on how to respond.

’” Jason Zander suggested that Azure would benefit from associating with Musk and Altman but that he wouldn’t want to “take a complete bath” in doing so. A subsequent analysis showed that Microsoft stood to lose about $150 million over several years if it provided the services Altman wanted.

“Unless he can help us draw a more direct networking effect with OpenAI->Microsoft business value, we will wind up having to pass,” Jason Zander wrote.

The thread was revived on January 10, 2018 with an email to Satya Nadella from Brett Tanzer. Sam Altman told Brett Tanzer that OpenAI could license its gaming AI to Microsoft’s Xbox video game division in exchange for $35-50 million in Azure Credits. Xbox couldn’t commit that much money.

Microsoft planned to tell Altman there would be no more discounts after that March. Satya Nadella forwarded the email to 15 Microsoft executives on January 10 2018 asking for their thoughts on OpenAI. “Overall I can’t tell what research they are doing and how if shared with us it could help us get ahead.

From what Elon is telling everyone… he feels Open AI is at verge of some big AGI breakthroughs… They clearly are pushing AI at a level none of our first party or third parties are,” Satya Nadella wrote. ” “I’m highly skeptical of an imminent breakthrough in AGI. IMO, they’re treating us like a bucket of undifferentiated GPUs, which isn’t interesting for us at all.

If they were, that could be interesting marketing,” Kevin Scott said. ” Microsoft told Altman that no team inside the company would commit to sponsoring OpenAI. In 2016 Microsoft agreed to provide $60 million worth of cloud computing services to OpenAI at a steep discount.

OpenAI consumed the services twice as fast as expected. OpenAI needed five times more computing power than it had originally secured from Microsoft to continue the project. Roughly 18 months after the 2017-2018 emails, Microsoft announced a $1 billion investment in OpenAI.

OpenAI created a for-profit arm that provided Microsoft with the potential to generate a return of $20 billion. From 2019 through 2023 Microsoft committed $13 billion in cash and cloud computing credits to OpenAI. Over the past few months OpenAI committed to spend $138 billion on Amazon cloud computing services and Amazon agreed to invest $15 billion to $50 billion in OpenAI.

Wired reported that the emails were introduced by Elon Musk’s attorneys to show Microsoft’s evolving relationship with OpenAI.