Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder Bob Evans. Guest host of today’s episode, focused on Microsoft and its artificial intelligence (AI) pivot, is Tony Uphoff. Each episode provides insights and perspectives around the “reimagination machine” that is the Cloud.
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00:32 — Microsoft was an early believer in OpenAI’s vision and potential, investing $1 billion in the startup in 2019. At the same time, Microsoft had its own AI research team, led by Peter Lee, which had grown to 1,500 people.
00:59 — In December of 2022, in a review with Lee and his AI research team, CEO Satya Nadella openly questioned why, with a team of only 250 people, OpenAI was so far ahead with the development of ChatGPT. He was reported to have bluntly asked, “Why do we even have Microsoft AI research?”
01:20 — What came next was one of the most dramatic and well-executed pivots Tony has ever seen in his 30 years as a tech industry insider. Ultimately, Microsoft decided to go all in on integrating OpenAI technology into all of its products. Last week, Microsoft announced OpenAI-powered Copilot products built into Windows, its Edge browser, and email and Office software.
01:44 — At the same time, Nadella decided to retain Microsoft AI research, doubling down on his endorsement of Lee and his team, and has, along with Microsoft CTO Kevin Scott, encouraged business units across Microsoft to use large language models (LLMs) from OpenAI, which they believe will fundamentally reshape how people interact with software.
02:25 — Microsoft’s speedy pivot contrasts with competitors like Google, which faces internal turf wars among competing AI teams. While Google was seen as the AI leader five years ago, today, in terms of the delivery of functional AI technology, that leader, in Tony’s view, is Microsoft.
02:52 — Microsoft’s integration of OpenAI technology has been swift and challenging, yet crucial in pushing the company to the AI forefront. “I would argue that Microsoft’s ability to understand the implications of ChatGPT and rapidly adopt the integration into its products will be remembered as a seminal step in the company’s continued success,” says Tony.