""Remember this was a nonprofit, and I think Bill [Gates] even said, 'Yeah, you're going to burn this billion dollars,'" Nadella said. Yet, Nadella and the Microsoft team weren't swayed by the pushback. While Nadella noted he needed to go through the proper channels and get board approval because of the size of the investment, he said that despite the risk, "it was not that hard to convince anyone that this is an important area.""
"In 2019, Microsoft viewed the partnership and investment in OpenAI partly as a way to gain a foothold in AI and to help promote Azure's AI capabilities. However, Nadella said, no one could have predicted the groundwork laid by that first investment, which led Microsoft to eventually pour $13 billion into OpenAI. "In retrospect, who would have thought? I didn't put in a billion dollars saying, 'Oh yeah, this is going to be a hundred bagger,'" he said."
Microsoft made a $1 billion investment in OpenAI in 2019 to gain a foothold in AI and promote Azure's AI capabilities. The investment required board approval and faced internal pushback, including concerns from cofounder Bill Gates, but Microsoft proceeded with a high risk tolerance. That initial funding laid the groundwork for further investment that grew to $13 billion and culminated in a restructuring granting Microsoft a 27% stake valued around $135 billion. Microsoft relinquished cloud exclusivity while securing an agreement for OpenAI to buy up to $250 billion in Azure services incrementally. OpenAI lifted Microsoft's net income by $7.6 billion and will pay 20% of revenue through 2032 under the reworked deal while gaining flexibility to source compute from other providers.
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