Microsoft’s AI head is plotting a future without OpenAI. According to a report from The Information, Mustafa Suleyman, the head of Microsoft’s AI division, has set his sights on a bold objective: reducing the company’s dependence on OpenAI.
In a report titled ‘Microsoft’s AI Guru Plots a Future Without OpenAI,’ The Information reported:
“After setbacks, Microsoft’s AI guru Mustafa Suleyman appears to be making slow progress helping the company wean itself off OpenAI”
Microsoft has poured over $13 billion into the AI firm since 2019, but now it wants more control over its own models and costs. Simple enough in theory—build in-house alternatives, cut expenses, and call the shots. But as a new report from The Information lays out, reality is a lot messier. Or as reporter Aaron Holmes put it, “easier said than done.”
“Last fall, during a video call with senior leaders at OpenAI and Microsoft, Suleyman—who leads Microsoft’s in-house artificial intelligence unit—wanted OpenAI staffers to explain how its latest model, o1, worked, according to someone present for the conversation and two other Microsoft employees who were briefed on it.”
The urgency behind this push became clear last fall during a high-stakes video call that had all the tension of a corporate power struggle. Suleyman and other Microsoft executives pressed OpenAI to reveal key technical details about its latest model, o1. This wasn’t just about curiosity. Since joining Microsoft in March 2024 after co-founding Inflection AI, Suleyman has been steering the company toward a future where its AI ambitions don’t rest on a single partner—no matter how cutting-edge that partner might be.
In a strategic move signaling
33 Comments
doublebind
Original story: Microsoft’s AI Guru Wants Independence From OpenAI. That’s Easier Said Than Done, https://www.theinformation.com/articles/microsofts-ai-guru-w…
jsemrau
For cloud providers it makes sense to be model agnostic.
While we still live in a datacenter driven world, models will become more efficient and move down the value chain to consumer devices.
For Enterprise, these companies will need to regulate model risk and having models fine-tuned on proprietary data at scale will be an important competitive differentiator.
aresant
Thematically investing billions into startup AI frontier models makes sense if you believe in first-to-AGI likely worth a trillion dollars +
Investing in second/third place likely valuable at similar scales too
But outside of that MSFTs move indicates that frontier models most valuable current use case – enterprise-level API users – are likely to be significantly commoditized
And likely majority of proceeds will be captured by (a) those with integrated product distribution – MSFT in this case and (b) data center partners for inference and query support
laluser
I think they both want a future without each other. OpenAI will eventually want to vertically integrate up towards applications (Microsoft's space) and Microsoft wants to do the opposite in order to have more control over what is prioritized, control costs, etc.
bredren
Despite the actual performance and product implementation, this suggests to me Apple's approach was more strategic.
That is, integrating use of their own model, amplifying capability via OpenAI queries.
Again, this is not to drum up the actual quality of the product releases so far–they haven't been good–but the foundation of "we'll try to rely on our own models when we can" was the right place to start from.
strangescript
I think they have realized that even if OpenAI is first, it won't last long so really its just compute at scale, which is something they already do themselves.
kittikitti
Surprising how Sam Altman's firing as CEO of OpenAI and moving to Microsoft wasn't mentioned in this article.
DeathArrow
It's only logical. OpenAI it's too expensive for what it produces. Deep Seek is on par with ChatGPT and the cost was lower. Claude development costs less, too.
knowitnone
Good. I'm plotting a future without Microsoft
meepmeepinator
Microsoft’s shift away from OpenAI reminds me of Google’s early AI struggles. Back in 2016, Google relied heavily on Nvidia GPUs for training models but saw the long-term cost risk. So, they built TPUs—custom AI chips—to take control of their infrastructure. Now, Microsoft is doing the same: developing in-house AI models (Phi-4) and custom silicon (Maia) to reduce reliance on OpenAI and Nvidia. But history shows that model independence is harder than it looks. Microsoft’s models are promising, but GPT-4 still outperforms them in general tasks. Meanwhile, integrating multiple models (OpenAI, Meta, Anthropic) into 365 Copilot is a major engineering challenge—consistency and latency issues are inevitable. If they pull it off, they’ll transform Azure into an AI-agnostic powerhouse. If not, they risk fragmentation and higher costs. Either way, this move signals the next phase of AI competition: infrastructure control.
agentultra
I had skimmed the headline and thought, "Microsoft is plotting a future without AI," and was hopeful.
Then I read the article.
Plotting for a future without Microsoft.
CodeCompost
Just partner with Deepseek
rdtsc
They probably saw the latest models like gpt 4.5 not being as revolutionary as expected and deepseek and others catching up.
only-one1701
Maybe I'm just cynical, but I wonder how much of this initiative and energy is driven by people at Microsoft who want their own star to rise higher than it can when it's bound by a third-party technology.
I feel like this is something I've seen a fair amount in my career. About seven years ago, when Google was theoretically making a big push to stage Angular on par with React, I remember complaining that the documentation for the current major version of Angular wasn't nearly good enough to meet this stated goal. My TL at the time laughed and said the person who spearheaded that initiative was already living large in their mansion on the hill and didn't give a flying f about the fate of Angular now.
RobertDeNiro
xAI could do it, deepseek could do it . Microsoft can as well. It’s not hard to see
rafaelmn
I'd be willing to bet that the largest use of LLMs they have is GitHub copilot and Claude should be the default there.
OpenAI has not been interesting to me for a long time, every time I try it I get the same feeling.
Some of the 4.5 posts have been surprisingly good, I really like the tone. Hoping they can distill that into their future models.
DebtDeflation
A couple of days ago it leaked that OpenAI was planning on launching new pricing for their AI Agents. $20K/mo for their PhD Level Agent, $10K/mo for their Software Developer Agent, and $2K/mo for their Knowledge Worker Agent. I found it very telling. Not because I think anyone is going to pay this, but rather because this is the type of pricing they need to actually make money. At $20 or even $200 per month, they'll never even come close to breaking even.
paxys
Microsoft's corporate structure and company culture is actively hostile to innovation of any kind. This was true in Ballmer's era and is equally true today, no matter how many PR wins Nadella is able to pull off. The company justifies its market cap by selling office software and cloud services contracts to large corporations and governments via an army of salespeople and lobbyists, and that is what it will continue to be successful at. It got lucky by backing OpenAI at the right time, but the delusion of becoming an independent AI powerhouse like OpenAI, Anthropic, Google, Meta etc. will never be a reality. Stuff like this is simply not in the company's DNA.
asciii
Clear as day when he said this during the openai fiasco:
"we have the people, we have the compute, we have the data, we have everything. we are below them, above them, around them." — satya nadella
lemoncookiechip
Insert Toy Story "I don't want to play with you anymore." meme here.
cft
OpenAI will in the end be aquired for less than its current valuation. Initially, I've been paying for Claude (coding), Cursor (coding), OpenAI (general, coding), and then started paying for Claude Code API credits.
Now I canceled OpenAI and Claude general subscriptions, because for general tasks, Grok and DeepSeek more than suffice. General purpose AI will unlikely be subscription-based, unlike the specialized (professional) one.
I'm now only paying for Claude Code API credits and still paying for Cursor.
partiallypro
Microsoft is just so bad at marketing their products, and their branding is confusing. Unfortunately, until they fix that, any consumer facing product is going to falter. Look at the new Microsoft 365 and Office 365 rebrands just of late. The business side of things will still make money but watching them flounder on consumer facing products is just so frustrating. The Surface and Xbox brand are the only 2 that seem to have somewhat escaped the gravity of the rest of the organization in terms of that, but nothing all that polished or groundbreaking has really come out of Microsoft from a consumer facing standpoint in over a decade now. Microsoft could build the best AI around but it doesn't matter without users.
JumpCrisscross
Softbank’s Masa’s magic is convincing everyone, every time, that he hasn’t consistently top ticked every market he’s invested in for the last decade. Maybe Satya’s finally broken himself of the spell [1].
[1] https://www.nytimes.com/2024/10/01/business/dealbook/softban…
DidYaWipe
Meanwhile I'm enjoying a present without Microsoft.
iambateman
If I invested $13 billion dollars, I’d expect to get answers to questions like “how does the product work” too.
maxrmk
If it's Mustafa vs Sam Altman, I know where I'd put my money. As much as I like Satya Nadella I think he's made some major hiring mistakes.
throwaway5752
They don't buy or acquire what they can build internally, and they partner with startups to learn if they can build it. This is not new.
outside1234
The more surprising thing would be if Microsoft wasn’t hedging their bets and planning for both a future WITH and WITHOUT OpenAI.
This is just want companies at $2T scale do.
d--b
OpenAI is over ambitious.
Their chasing of AGI is killing them.
They probably thought that burning cash was the way to get to AGI, and that on the way there they would make significant improvements over GPT 4 that they would be able to release as GPT 5.
And that is just not happening. While pretty much everyone else is trying to increase efficiency, and specialize their models to niche areas, they keep on chasing AGI.
Meanwhile more and more models are being delivered within apps, where they create more value than in an isolated chat window. And OpenAi doesn’t control those apps. So they’re slowly being pushed out.
Unless they pull off yet another breakthrough, I don’t think they have much of a great future
guccihat
Currently, it feels like many of the frontier models have reached approximately the same level of 'intelligence' and capability. No one is leaps ahead of the rest. Microsoft probably figured this is a good time to reconsider their AI strategy.
danielovichdk
Ballmer would have caught this earlier.
Watch.
Nadella will not steer this correctly
debacle
It's clear that OpenAI has peaked. Possibly because the AI hype in general has peaked, but I think moreso because the opportunity has become flooded and commoditized, and only the fetishists are still True Believers (which is something we saw during the crypto hype days, but most at the time decried it).
Nothing against them, but the solutions have become commoditized, and OpenAI is going to lack the network effects that these other companies have.
Perhaps there will be new breakthroughs in the near future that produce even more value, but how long can a moat be sustained? All of them in AI are filled in faster than the are dug.
crowcroft
I mean, obviously? There is no good reason to go all in on OpenAI for Microsoft?
Also a bit hyperbolic. I'm sure there are good reasons Microsoft would want to build it's own products on top of their own models and have more fine control of things. That doesn't mean they are plotting a future where they do nothing at all with OpenAI.