Altman and Nadella ignited the AI boom together, drift apart now

Microsoft and OpenAI still wield huge power over one another despite preparing for independent futures

- Deepa Seetharaman, Berber Jin & Keach Hagey

Sam Altman once said OpenAI and Microsoft had the "best partnership in tech." Now, their Silicon Valley marriage is on the rocks.

Microsoft turbocharged the AI startup's growth over the past six years with billions of dollars in funding, helping OpenAI's ChatGPT accumulate more than 500 million weekly users. OpenAI powered cutting-edge generative AI tools for the technology giant, helping its share price triple.

That relationship has become strained. The CEOs are increasingly at odds over the computing power Microsoft provides to OpenAI, the access the startup gives the technology giant to its models and whether the Altman-led company's AI systems will soon achieve humanlike intelligence, according to people familiar with their relationship. Microsoft CEO Satya Nadella has also made it a priority to beef up sales and usage of ChatGPT rival Copilot, and last year hired a rival of Altman's who launched a secret effort to build models for Microsoft that would reduce its dependence on OpenAI.

While they are preparing their companies for independent futures, both still wield tremendous power over one another at a critical moment in the global AI race.

Microsoft can effectively block OpenAI's effort to restructure into an independent for-profit company, according to people familiar with the matter. OpenAI could lose tens of billions of dollars if the conversion doesn't happen by the end of this year. Microsoft hasn't to date threatened to do so, a person familiar with the matter said.

OpenAI's board, meanwhile, can trigger a clause in its contract that prevents Microsoft from accessing its most cutting-edge technology, people familiar with the matter said. OpenAI officials have raised the possibility of doing so over the past year, some of the people said.