Microsoft and OpenAI ‘bromance’ begins to fray

Last fall, Sam Altman, OpenAI’s CEO, asked his counterpart at Microsoft, Satya Nadella, if the tech giant would invest billions of dollars in the startup.

Microsoft had already pumped $13 billion into OpenAI, and Nadella was initially willing to keep the cash spigot flowing. But after OpenAI’s board of directors briefly ousted Altman last November, Nadella and Microsoft reconsidered, according to four people familiar with the talks who spoke on the condition of anonymity.

Over the next few months, Microsoft wouldn’t budge as OpenAI, which expects to lose $5 billion this year, continued to ask for more money and more computing power to build and run its artificial intelligence systems.

Altman once called OpenAI’s partnership with Microsoft “the best bromance in tech,” but ties between the companies have started to fray. Financial pressure on OpenAI, concern about its stability and disagreements among employees of the two companies have strained their five-year partnership, according to interviews with 19 people familiar with the relationship between the companies.

That tension demonstrates a key challenge for AI startups: They are dependent on the world’s tech giants for money and computing power because those big companies control the massive cloud computing systems the small outfits need to develop AI.