If 2025 ends Two of the biggest players in AI and tech are joining forces. up being a close study in AI development, it’s probably helpful to know who the biggest players are.
And it seems like if we go back and analyze the dramatic rise of personal computing through the last half of the 20th century, there’s a through line in what companies are most influential in developing new consumer and enterprise technologies.
This may be the biggest example – a growing alliance between the Microsoft empire of Bill Gates, and the OpenAI juggernaut headed by Sam Altman. It’s a set of deals that has dimension, and a lot of impact on our world.
These two men are of different generations (Gates is 69, Altman 39), and their companies presided over different revolutions But Microsoft and OpenAI are coming together to offer some of the most relevant new services and capabilities to the market.
Money in the Deal
First, Microsoft is giving a lot of money to open AI. Coverage from GeekWire puts this number at around $13 billion, citing quarterly filing documents. Writer Todd Bishop shows how some of that may lead to losses for the blue-chip maker of the Windows operating system that dominated personal computing for decades.
However, Microsoft people are sanguine:
“Our partnership with OpenAI also continues to deliver results,” Microsoft CEO Satya Nadella said as quoted in Bishop’s coverage in October. “We have an economic interest in a company that has grown significantly in value.”
Elements of the Partnership
So what does this partnership look like?
There are three major parts of this deal that deserve a spotlight.
A Microsoft statement enumerates these shared strategies:
First, there’s the pursuit of scaling solutions for neural networks. A Microsoft statement from the early days of the exchange puts it this way: “Microsoft will increase our investments in the development and deployment of specialized supercomputing systems to accelerate OpenAI’s groundbreaking independent AI research.”
Then there’s Microsoft’s ability to use OpenAI products and services in exclusive ways. This is presumably a big part of what the older company gets out of the deal. Because, again, OpenAI products and services are popular.
Finally, Microsoft will be OpenAI’s exclusive cloud vendor, with all of the AI company’s operations working on the MS Azure platform. That’s not bad for Microsoft, either.
The Energy Equation
At the same time, as part of this alliance, Microsoft is also pursuing ways to manage to enormous energy needs resulting from this explosion in the market.
Here, for example, we’re looking at a move by the U.S. federal General Services Administration for an $840 million contract with Constellation Energy, in addition to a plan by the same parties to resurrect the notorious Three Mile Island nuclear plant in Pennsylvania. Although the second nuclear reactor of TMI continued to quietly operate until 2019, there’s a lot of fear around the story of the plant itself, and some of these plans may generate pushback.
In general, people are working behind the scenes to get the public more conditioned to accept broader nuclear power infrastructure across the country.
In fact, if you’re paying attention to energy news, just today, news media outlets are reporting that the Biden administration extended some of its tax credits from wind, solar and conventional renewable, to nuclear and geothermal.
All of that is intended to help find new ways to feed powerful data centers where the AI of the future will live.
Personal Technologies for our Times
One thing that sticks out to me about this joint venture is that Microsoft and OpenAI have a lot in common.
If you’re old enough to remember when you got your first computer and started to navigate the desktop, you’re familiar with how the simple PC-DOS command line system was quickly replaced by this elegant GUI of boxes on the screen, or ‘windows’, and how that eventually became co-branded with the Microsoft name, making Bill Gates an unparalleled superstar around the world.
And OpenAI, really, in some ways, is doing much the same thing with ChatGPT. If you hear people on the street talking about using AI personally, they’re usually talking about some version of GPT, often by name, and competitor models just aren’t getting the same name recognition or panache as the offerings of Altman’s company.
So often in the technology world, it tends to happen that one brand sort of dominates the market. Google did it with search, but now you don’t have to look far to see that ChatGPT is reinventing search for the masses, too. We’re soon going to get our search results through natural language, and not typing in random keywords in a text box.
And the Microsoft-OpenAI partnership is likely to be the main vehicle for this transformation.
I know there’s a lot to look out for in 2025, and this is only one aspect of how AI is going to integrate itself into our lives. But from a market standpoint, it’s one to keep an eye on.
