Once described as the "best partnership in tech," the relationship between Microsoft CEO Satya Nadella and OpenAI CEO Sam Altman has significantly cooled, with their frequent text exchanges now reduced to scheduled weekly calls.
According to reporting from the Wall Street Journal, the partnership that helped propel both companies to the forefront of the AI revolution is showing signs of strain as each leader prepares for an independent future.
The tension arises from multiple fundamental points of conflict. Microsoft and OpenAI are increasingly at odds over computing resources, model access, and differing views on whether OpenAI's systems will soon achieve humanlike intelligence, according to people familiar with the relationship.
Sam Altman’s firing from OpenAI is when the relationship between him and Nadella started to change
At the height of their partnership, Nadella would frequently text Altman multiple times in succession, with Altman responding in kind. OpenAI employees recall that when internal negotiations stalled, Altman would post screenshots of his conversations with Nadella directly to the company Slack to expedite matters.
The WSJ reports that the relationship dynamic began changing after Altman's brief ouster in late 2023, which prompted Nadella to seek an "insurance policy" against future disruptions. This led to Microsoft's controversial $650 million acquisition of Mustafa Suleyman's team from Inflection to build competing AI models.
The friction between OpenAI and Microsoft
Adding to the friction, OpenAI was reportedly slow to share code for its powerful reasoning model last summer, while Microsoft has pushed back against OpenAI's claims about approaching humanlike AI capabilities.
The cooling relationship manifested publicly when Altman announced the Stargate project in January alongside Oracle and SoftBank—a data center initiative resembling what he had previously hoped to accomplish with Microsoft. Nadella was notably absent, attending the World Economic Forum in Davos at the time.
Despite the growing distance, both companies remain deeply intertwined. Microsoft can effectively block OpenAI's restructuring into a for-profit company, while OpenAI retains contractual power to restrict Microsoft's access to its most advanced technology.