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Microsoft's Early AI Bet Faced Competitive Risks, Court Records Show

Microsoft executives worried as early as 2022 that their partnership with OpenAI could backfire, court testimony revealed this week. CEO Satya Nadella expressed concern that the software giant might become a mere infrastructure provider while OpenAI captured the lion's share of value in artificial intelligence development. Nadella drew parallels to Microsoft's own rise in the 1980s, when it surpassed IBM despite the computer maker's early dominance. The company had made its first $1 billion investment in OpenAI roughly three years earlier. Nadella sought to ensure Microsoft held meaningful leverage across the technology stack. Nadella testified that Microsoft needed more than cloud service agreements to protect its position as generative AI emerged as a transformative market force.