Microsoft's FOMO after seeing Google AI drove investment in OpenAI

Historical email in antitrust case shows execs 'very, very worried' about capability gaps

A fascinating insight into Microsoft's inner workings has been thrown up in some redacted document dumps related to the ongoing Google antitrust trial in the US.

Lurking within the documents is a 2019 email from Microsoft's Chief Technology Officer, Kevin Scott, voicing concerns about a perceived gap in capability between the Windows giant and the likes of Google and OpenAI. The title of the email? "Thoughts on OpenAI."

Hard though it may be to believe nowadays, in 2019 AI was not the only thing Microsoft was talking about. Sure, the tech was lurking behind the scenes, but compared to the wall-to-wall coverage of recent years, AI was just another thing the company was working on.

However, Microsoft was paying attention to what the competition was doing. In a heavily redacted email made available as part of the ongoing legal process, Scott admitted he had been initially dismissive of the efforts of OpenAI and Google.

Shades of Ballmer and the iPhone from years back?

Not this time around. Scott kept digging and realized that Microsoft was some way behind its competitors. He said: "When all these programs were doing was competing with one another to see which RL system could achieve the most impressive game-playing stunt, I has [sic] highly dismissive of their efforts.

"That was a mistake.

"When they took all of the infrastructure that they had built to build NLP [Natural Language Processing] that we couldn't easily replicate, I started to take things more seriously.

"And as I dug in to try to understand where all of the capability gaps were between Google and us for model training, I got very, very worried."

Scott went on to worry that while the company had "very smart ML people," he said that ambitions had been constrained and a learning process would need to be gone through in order to scale up.

"And we are multiple years behind the competition in terms of ML scale."

In 2019, Microsoft would plow a billion dollars into OpenAI, go on to license the company's technology and invest more in the years following.

AI services have since spread throughout Microsoft's technology stack, as well as attracting multiple lawsuits from copyright holders concerned about where all the training data has come from.

The released text provides a portal to the past when Microsoft wondered how it could compete with Google, not just in search but also in other areas such as email. Microsoft CEO Satya Nadella took to the stand in 2023 to testify in the US government's antitrust trial against Google.

The documents were filed under seal at the time, with the tech giants lawyers managing to argue successfully that sensitive business information might lie within. However, media outlets, including NYT and Bloomberg, recently successfully petitioned the court that the public should be allowed to see at least some of it. And here we are: a heavily redacted version, but one that shows just how worried Microsoft was about falling behind in AI.

According to Bloomberg, Judge Amit Mehta ordered a redacted version of the documents released on the grounds the contents "shed light on Google's defense concerning relative investments by Google and Microsoft in search."

Microsoft CFO Amy Hood, bravely using Mail for Windows 10, said the email explained "why I want to do this... and also why we then ensure our infra folks execute." ®

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