“The best bromance in tech” is under strain: It’s between OpenAI and Microsoft

Sam Altman, the co-founder of OpenAI, called its partnership with Microsoft “the best bromance in technology,” but that’s at risk now that Microsoft is increasingly trying to hedge its bets, according to a New York Times report.

This began after Altman’s brief ouster by OpenAI’s board last November; An incident that surprised and worried Microsoft CEO Satya Nadella, according to the report, which adds that Microsoft has become increasingly hesitant to supply OpenAI with the cash and computing power it needs as it expects to lose 5 billion dollars this year.

Read also: Elon Musk’s X users flock to another platform after controversial new changes: No Threads, it’s Bluesky

OpenAI’s annual IT spending is also expected to soar to $37.5 billion by 2029.

In addition to OpenAI’s financial pressures, concerns about its stability and disagreements between the two companies’ employees have also contributed to the strain in the five-year partnership, according to the report.

Why did OpenAI and Microsoft employees clash?

Microsoft had become increasingly concerned that its AI work was too dependent on OpenAI, so it spent $650 million to hire most of the staff at Inflection, an OpenAI competitor, in order to all its co-founder, Mustafa Suleyman, overseeing a new Microsoft team that was working. AI consumer products based on OpenAI software.

However, this has angered dozens of OpenAI executives, including Altman, with some OpenAI staff members complaining that Suleyman called out an OpenAI employee during a video call because he thought a new technology would not it was delivered to Microsoft quickly enough.

Read also: Indian jeweler becomes billionaire after 192-year-old company goes public: report

Other complaints followed after Microsoft engineers downloaded important OpenAI software without following protocols the two companies had agreed upon, according to the report.

What has OpenAI done for funding since then?

OpenAI’s exclusive deal with Microsoft was to buy computing power from Microsoft and work closely on new AI products, but OpenAI has also tried to renegotiate the deal to get more computing power and reduce its huge expenses, according to the report

After increasingly getting the cold shoulder from Microsoft, the AI ​​giant has now tried to negotiate a lower cost of computing power from other companies, with Oracle leading the way, after Microsoft agreed to an exception to the contract

According to the report, OpenAI signed a roughly $10 billion IT deal with Oracle for additional computing resources.

OpenAI also sought other investors. These include Apple (potential partnership meetings have been brewing for years, with Apple finally agreeing to put ChatGPT on the iPhone), Nvidia (as it may provide chips), and the United Arab Emirates-based tech investment firm MGX (To build new data centers worldwide) .

While Apple did not invest, OpenAI closed a $6.6 billion funding round from Thrive Capital, with additional participation from Nvidia, MGX and others, according to the report.

Read also: Here’s how much Mukesh Ambani’s driver allegedly earns – it’s more than some executives