Microsoft Is Happy Being the Co-Pilot on the OpenAI Rocket Ship

Until Nov. 17, the conventional wisdom in Silicon Valley was that Microsoft Corp.’s partnership with OpenAI was an enviable success. The investment boosted Microsoft’s cloud computing business, gave the company access to OpenAI’s most advanced technology, reinvigorated its Bing search engine and helped streamline a sprawling artificial intelligence research effort. And because Microsoft owned less than 50% of OpenAI’s equity, the company avoided the sort of antitrust scrutiny that has followed it since the 1990s.

But one of the drawbacks of outsourcing key technology to a startup—even one that many people have begun to regard as a de facto subsidiary—is that it can blow itself up without so much as a friendly warning. Microsoft found out about the ouster of OpenAI Chief Executive Officer Sam Altman only minutes before the news was announced publicly, sending executives scrambling and the company’s stock price sinking.