I’m told mine is a contrarian view on the events of the last few days, so here goes… Contrary to what @kevinroose and others have written, Microsoft was not a winner of the events of the last few days around #OpenAI. They were in a much better place on Friday morning last week

I’m told mine is a contrarian view on the events of the last few days, so here goes… Contrary to what

and others have written, Microsoft was not a winner of the events of the last few days around #OpenAI. They were in a much better place on Friday morning last week than they are today. Friday morning they had invested ~$11B in OpenAI and captured most of its upside while still having enough insulated distance to allow

to claim things to regulators like “ChatGPT is more open than Meta’s Llama” and to allow any embarrassing LLM hallucinations or other ugliness to be OpenAI’s problem, not Microsoft’s. Sunday morning they were at their lowest point. There was real risk they lose all their ~$11B investment and look like absolute fools for making that size of investment without any real governance controls. Very smart people who have followed the news carefully, including some big fund managers who hold

, are still pinging me asking: how was that even possible? Today they are better off than Sunday morning, but far, far worse off than they were Friday morning. Sure they will likely hire a bunch of the OpenAI team. But that doesn’t get them much they didn’t have before, and it comes with a ton of new reputational risk (they now own responsibility for any hallucinations or other ugliness) and execution risk (see DeepMind within Google for how all the smartest people in AI can still get stymied by the bureaucracy of a giant company). I think the chances of the senior OpenAI folks still being at Microsoft in 3 years is asymptotically approaching zero. Where the independence and clear mission of OpenAI was exactly what could have kept that group of incredible talent motivated and aligned over the long term, making Office365 spreadsheets a bit more clever isn’t something that rallies a team like their’s. Sure they’ll try and have some level of independence, but the machinery of a trillion dollar+ business software behemoth is hard to not get caught up in and ground out by. This was a very bad weekend for Microsoft (and, for that matter, OpenAI). I don’t see any clear winners. (Maybe

or

— indirectly?) It could have been worse, but it has still been a disaster for everyone directly involved. We’re not at the end of this story. But don’t see a lot of ways in the short term it gets better for Microsoft. And really hard to see how it could get better even over the long term than it looked for them and OpenAI Friday morning last week.