Nadella Says Microsoft ‘Comfortable’ With OpenAI Governance


Microsoft chief Nadella says he is ‘comfortable’ with OpenAI’s non-profit governance structure, plays down competition issues

Microsoft chief executive Satya Nadella has said Microsoft is not aiming to increase its control over OpenAI and is “comfortable” with the firm’s non-profit governance structure, two months after OpenAI’s board unexpectedly fired and then re-hired chief executive Sam Altman in November.

“What we just want is good stability,” Nadella reportedly said at a Bloomberg News event at the World Economic Forum in Davos, Switzerland.

“We invested, we partnered when they were whatever they were and whatever they are today — a capped-profit, nonprofit, what have you. So I’m comfortable. I have no issues with any structure.”

Microsoft secured a non-voting board observer role at OpenAI following Altman’s firing and return, but Nadella said Microsoft isn’t seeking a board seat.

Image credit: Sam Altman/X nadella
Image credit: Sam Altman/X

Communications breakdown

The OpenAI board firing of Altman over a supposed communications breakdown spurred widespread disruption at the company, with employees threatening to walk out en masse and work for Microsoft, before the board finally relented and rehired Altman days later.

Microsoft has invested some $13 billion (£10bn) in OpenAI, making it the start-up’s biggest investor, and is integrating OpenAI’s generative AI tools, such as ChatGPT, across its line-up.

But Nadella said he also doesn’t see Microsoft as being too dependent on the start-up, noting that Microsoft provides key technology OpenAI needs for its products and that Microsoft is conducting its own AI research apart from that of OpenAI.

He said he felt “good” about “the construct that we have”, adding, “I feel at the same time very capable of controlling our own destiny.”

Competition scrutiny

Competition authorities in the EU, the UK and reportedly the US are examining Microsoft’s relationship with OpenAI on competition grounds.

Microsoft is OpenAI’s exclusive provider of the massively powerful cloud infrastructure its offerings require and in exchange the terms of the firms’ agreement reportedly guarantee Microsoft a large share of the start-up’s profit under certain conditions.

Nadella said the fact that OpenAI is not a subsidiary is a boost to competition.

“Partnerships is one avenue of, in fact, having competition,” he said, adding that the company’s years of investments in the start-up were a “highly risky bet” and “not all conventional wisdom”.