Could Microsoft be about to steal a competitive advantage over Google in machine learning?

In 2019, Microsoft invested some $1 billion in OpenAI LP, the for-profit division of nonprofit OpenAI Inc., which was created in December 2015 by Sam Altman, Elon Musk, Reid Hoffman, Peter Thiel, Amazon Web Services and other investors, who between them contributed another billion dollars to develop open-source machine learning. Elon Musk then withdrew from the board, remaining with the company as a potential donor, with no active involvement in its management.

Microsoft’s investment was split between a small part in cash and another in Azure usage bonuses, enough for the company to live rent-free on Microsoft’s cloud until now (despite its opening to the public and the drop in the price of its API, which sharply increased its activity), rather than on Amazon’s. This form of investment, widely used by Microsoft with promising startups, limits its financial exposure but gives it access to a lot information about the company and the option to increase its stake in it.

Under the terms of the deal, Microsoft could now get rights to 75% of the profits generated by OpenAI LP until it has recouped its investment, and then take a 49% stake in the company, with another 49% divided among other potential investors, and 2% held by the non-profit parent, OpenAI, Inc. The company…