Only a fraction of Microsoft’s $10 billion investment in OpenAI has been wired to the startup, while a significant portion of the funding, divided i

OpenAI has received just a fraction of Microsoft’s $10 billion investment

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2023-11-18 21:00:13

Only a fraction of Microsoft’s $10 billion investment in OpenAI has been wired to the startup, while a significant portion of the funding, divided into tranches, is in the form of cloud compute purchases instead of cash, according to people familiar with their agreement.

That gives the software giant significant leverage as it sorts through the fallout from the ouster of OpenAI CEO Sam Altman. The firm’s board said on Friday that it had lost confidence in his ability to lead, without giving additional details.

One person familiar with the matter said Microsoft CEO Satya Nadella believes OpenAI’s directors mishandled Altman’s firing and the action has destabilized a key partner for the company. It’s unclear if OpenAI, which has been racking up expenses as it goes on a hiring spree and pours resources into technological developments, violated its contract with Microsoft by suddenly ousting Altman.

Microsoft has certain rights to OpenAI’s intellectual property so if their relationship were to break down, Microsoft would still be able to run OpenAI’s current models on its servers.

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