Microsoft CEO Satya Nadella Says Bill Gates Warned Him That Investing in OpenAI Could Waste $1 Billion
Microsoft CEO Satya Nadella says Bill Gates once warned that investing $1 billion in OpenAI could be a mistake. That investment is now worth billions.
Key Points
- ➤ Microsoft invested $1 billion in OpenAI in 2019, combining cash and Azure cloud credits when OpenAI was still a nonprofit research group.
- ➤ Bill Gates reportedly warned CEO Satya Nadella that the move could fail, given the uncertainty around early artificial intelligence research.
- ➤ The investment led to the creation of OpenAI’s limited-profit structure, allowing commercial partnerships and broader funding opportunities.
- ➤ Microsoft has since poured in over $13 billion and now owns about 27% of OpenAI’s for-profit arm, valued at around $135 billion.
- ➤ All OpenAI systems, including ChatGPT, are powered by Microsoft’s Azure cloud infrastructure for training and deployment.
- ➤ OpenAI’s technology now drives Microsoft’s Copilot features across Bing, Office, and Windows, blending AI with everyday software.
- ➤ ChatGPT attracts over 800 million weekly users worldwide, making it one of the fastest-growing digital platforms in history.
- ➤ Despite its global growth, OpenAI remains guided by a nonprofit board through the OpenAI Foundation to ensure balanced oversight.
Microsoft made its first $1 billion investment in OpenAI in 2019, just four years after the AI startup was founded. At the time, OpenAI was still a nonprofit organization with limited commercial traction. According to Nadella, securing approval for such a large investment required convincing both Microsoft’s leadership and board members of the technology’s long-term potential.
“Even at Microsoft, you have to get board approval to spend a billion dollars,” Nadella said in an interview with TPBN, a technology-focused YouTube channel. “It wasn’t easy, but we knew this was an important area for the future, even if it carried risk.”
Nadella recalled that Bill Gates, Microsoft’s co-founder, was initially cautious about the plan. “This was a nonprofit back then,” Nadella said. “Bill even told me, ‘You’re going to burn this billion dollars.’ But we had a high risk tolerance and wanted to give it a real shot.”
Since then, Microsoft has invested more than $13 billion in OpenAI, becoming the company’s largest backer and its exclusive cloud partner. The partnership has helped Microsoft integrate generative AI into products such as Office, Bing, and Azure, positioning the company as a leader in the rapidly expanding AI sector.
OpenAI gained worldwide recognition in November 2022 after launching ChatGPT, a chatbot that quickly became a global phenomenon. The tool attracted over one million users within five days, fueling widespread public interest in generative AI.
Earlier this month, OpenAI completed a major corporate restructuring. Its nonprofit foundation now oversees a new public benefit corporation, OpenAI Group PBC, which manages its for-profit operations. Microsoft currently holds a 27% stake in OpenAI’s commercial business, valued at about $135 billion.
At OpenAI’s annual DevDay conference on October 6, CEO Sam Altman announced that more than 800 million people now use ChatGPT weekly. Microsoft’s share price has climbed nearly 29% this year, reflecting investor confidence in its AI-driven growth strategy.
OpenAI Financial Overview (2020–2025)
OpenAI’s revenue has grown steadily since 2020, driven by its commercial partnerships and rising user adoption of ChatGPT and API services. While operational expenses have also increased, the gap between revenue and spending has narrowed, indicating progress toward profitability by 2025.
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