Rift Deepens Between Microsoft and OpenAI as Stargate Plans Unfold

News 31 Jan 2025

In his CNBC interview from Davos, Salesforce CEO Marc Benioff displayed strong laughter while talking about Microsoft and OpenAI’s growing technological rift. OpenAI drops Microsoft as its exclusive cloud provider when it joins forces with SoftBank and Oracle for a $500 billion Stargate data center initiative.

According to Benioff, a strategic need exists for OpenAI to create multiple platforms. Microsoft continues to create its own AI models because it might not need OpenAI’s resources in the future. Microsoft’s appointment of Mustafa Suleyman, who founded both DeepMind and Inflection AI, demonstrates a definite shift in Microsoft’s plans. During last year’s Davos meetings, Benioff described moments of tension between Suleyman and OpenAI CEO Sam Altman.

This split seemed inevitable. OpenAI encountered major processing power problems which showed the requirement to expand its computing network. Throughout its development process, OpenAI’s agreement with Microsoft was designed to end up achieving artificial general intelligence capabilities.

Sources indicate that tensions between the two companies escalated to a boiling point since mid-year because of OpenAI’s launch of its enterprise product. OpenAI employees treated their Microsoft counterparts with contempt after CEO Sam Altman’s brief defrocking from his CEO position occurred late in 2023. Microsoft disclosed MAI-1 alongside the new AI division under Jay Parikh during its press briefing without mentioning OpenAI or its AI capabilities.

The problem between Salesforce and OpenAI presents an opportunity for greater gains to Benioff. Enterprise models from OpenAI help power Salesforce operations, and the company continues investing in competitive AI startup Anthropic. OpenAI’s flowing popularity meets its decisive turning point as companies battle to advance AI innovations.

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