Microsoft’s Nadella disputes Musk claim of controlling OpenAI

Microsoft Corp. is not in control of OpenAI, Chief Executive Officer Satya Nadella said in an interview aired Tuesday, disputing the allegation by Elon Musk.

Musk had claimed that Microsoft, by virtue of its multibillion-dollar investment in ChatGPT maker OpenAI, was effectively in control of the startup. Nadella pushed back on that claim and went further in saying that small players very much have a chance to compete against large firms like his and Alphabet Inc.’s Google.

The Microsoft CEO said OpenAI’s board was steering the ship, contradicting Musk, who pulled out of the startup years ago and has advocated slowing AI development over potential ethical concerns.

“OpenAI is very grounded in their mission of being controlled by a nonprofit board,” Nadella said. “We have a non-controlling interest in it, we have a great commercial partnership in it.”

The ability of smaller companies to break into AI will “depend on product-market fit” and it’s not guaranteed that Microsoft and Google will be “the only two games in town,” Nadella said.

Nadella pointed to search as an example of how AI has sparked fresh competition in a space dominated by Google’s engine.

“Who would have thought? Last year if you were sitting here and somebody had said to you, ‘well, you know what, there will be a real contest around search and people may actually even dream that there’s an alternative to Google,’” Nadella said, citing Bing and ChatGPT as rising competitors.

“There are lots of other folks who have entered the search market. That to me ought to be celebrated,” he said.

© 2023 Bloomberg