Emails revealed that Microsoft's $1 billion investment in OpenAI was due to Google's concerns

Microsoft invested $1 billion in OpenAI in 2019 because it was “very concerned” that Google was years ahead in scaling its AI efforts. An internal “Thoughts on OpenAI” email between Microsoft CTO Kevin Scott, CEO Satya Nadella, and co-founder Bill Gates reveals some high-level discussions about an investment opportunity in the months leading up to Microsoft unveiling the partnership.

The email was released on Tuesday as part of the US Department of Justice's ongoing antitrust case against Google. Interested in trade Reports.

“We are several years behind the competition in terms of the scale of machine learning,” Scott wrote in his June 12, 2019, email to Nadella and Gates. He details how it took Microsoft engineers six months to replicate and train Google's BERT language model “because our infrastructure wasn't up to the task.”

Scott says he initially dismissed OpenAI and Google DeepMind's AI efforts when the two companies were competing to see who “could pull off the most impressive game” — an apparent reference to Google DeepMind's AlphaGo Zero demos. Scott quickly became even more impressed when things moved toward natural language processing models. “As I delved into trying to understand where all the capability gaps were between Google and us in terms of modular training, I felt very, very concerned,” Scott wrote.

Scott said some of Google's early AI models helped it gain a competitive advantage against Bing, and he even praised Google's autocomplete features in Gmail, which “have gotten scary good” in 2019.

Nadella responded to Scott's ideas about OpenAI by sending them to Microsoft CFO Amy Hood, stating that this was “the reason I wanted to do it.” Hood is a key member of Microsoft's senior leadership team, charged with overseeing the company's financial goals and regularly monitoring Microsoft's spending.

The email chain, which you can read below, is heavily redacted and appears to be a response to Nadella or Gates. While Gates stepped down from Microsoft's board in 2020 amid an investigation into an affair with an employee, he is said to remain a big part of Microsoft's ongoing relationship with OpenAI. It's not clear from this internal email who started the discussion about OpenAI in 2019, however Interested in trade mentioned Earlier this week, Gates had been meeting regularly with OpenAI since 2016 and helped broker the deal.

Microsoft has now invested more than $13 billion in OpenAI, adding its models to Office apps, Bing, Edge, and even within its own Windows operating system. It has helped Microsoft be seen as a leader in AI, rather than falling behind as it once feared five years ago. Nadella also recently made AI and security top areas of focus for Microsoft in 2024 and beyond, suggesting that the rollout of AI features in Microsoft products is not about to slow down.