Different priorities

Jason Andersen, vice president and principal analyst, Moor Insights & Strategy, noted that the two companies have different priorities. “OpenAI focuses on delivering the best models in service of the mission of achieving AGI [artificial general intelligence]. There are not many (or any) multi-billion dollar revenue engines with that level of single-mindedness. I believe that Microsoft is dealing with a wide range of AI priorities and that’s precisely why [Microsoft AI CEO] Suleyman was brought in to balance these efforts,” he said. “This range of priorities is also why we have seen Microsoft partner with other LLM [large language model] companies despite having its own products and the OpenAI partnership. Shifting to a multi-model mindset is significant and reinforces the point that right now model pure plays will have an innovation advantage in areas where they focus.”

Justin St-Maurice, technical counselor at Info-Tech Research Group, added that the firms’ technologies are very different as well.

“Instead of operating through a series of functions with predictable inputs and outputs, LLMs accept any arbitrary input. They behave chaotically, with natural system properties,” he observed. “Operating this new type of technology has been OpenAI’s bread and butter since day one, whereas Microsoft has a legacy of thinking, processing, and designing that are fixed in an old paradigm. That said, Microsoft Research has been working on large-scale AI models for years now, so while OpenAI has had a head start on embracing the new paradigm, Microsoft isn’t starting from zero.”