Is Microsoft Turning Into 'IT For OpenAI'? Insiders Say Tech Giant's AI Strategy Is Overly Reliant On ChatGPT Parent's Partnership

Microsoft Corp MSFT insiders are expressing concerns that the company’s AI strategy is becoming too focused on its partnership with ChatGPT-maker OpenAI, to the extent that it is being dubbed the “IT for OpenAI.”

What Happened: Some Microsoft insiders are worried that the company’s AI strategy is becoming overly reliant on its partnership with OpenAI. This concern has led to the departure of executives who were involved in Microsoft’s in-house AI initiatives, reported Business Insider.

The AI Platform team, led by Eric Boyd and situated within the Cloud + AI organization run by Scott Guthrie, has reportedly shifted its focus from in-house AI plays to the OpenAI partnership. This change has led to a decline in internal services that previously made up Azure AI Services.

According to insiders, Microsoft is shifting its focus away from the internal services that formerly constituted Azure AI Services and towards the Azure OpenAI service.

A former executive who departed due to these changes mentioned that products like Azure Cognitive Search, Azure AI Bot Service, and Kinect DK have essentially disappeared. Frank Shaw, a spokesperson for Microsoft, stated that while these services still exist in some capacity, they may no longer belong to the Azure AI organization, have been rebranded, or have been incorporated into other products.

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One former executive, who left due to these changes, said “The former Azure AI is basically just tech support for OpenAI.” This shift has led to resentment and the departure of some executives who had worked on Microsoft’s homegrown AI initiatives.

“Eric Boyd is effectively maintaining the OpenAI service. It’s less of an innovation engine than it once was. Now it’s more IT for OpenAI. The beating heart of innovation is elsewhere.”

The Azure OpenAI service is backed by a team of hundreds of developers who assist customers of Microsoft’s Azure cloud service in utilizing OpenAI’s GPT models. Certain Microsoft staff members collaborate closely with OpenAI, to the extent that they possess badges granting access to OpenAI’s offices, while some OpenAI employees can similarly access Microsoft locations, according to the report.

Why It Matters: This development comes amid a series of significant events in the AI industry. Microsoft’s investment in Mistral AI signaled a shift in AI development, raising questions about the future of its partnership with OpenAI. Furthermore, OpenAI’s reported development of a web search tool that could rival Google‘s dominance has added another layer of competition to the AI landscape.

Microsoft’s AI strategy has been under scrutiny, with the European Union investigating its $13 billion investment in OpenAI for potential anti-competitive practices. These recent internal concerns at Microsoft further highlight the evolving dynamics in the AI industry and the impact on major players like Microsoft.

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Microsoft and OpenAI. Photo via Shutterstock