It’s been a big week for Microsoft. We’ve written before about the structural advantages that incumbent platforms have in AI, and Microsoft is doing its darnedest to drive that point home.
First up? Inflection AI. In June 2023, the company announced it had raised $1.3 billion in funding. The lead investor? Microsoft. The company was building with the vision of conversational AI. The problem was the rapid progress in similar AI across the landscape. With the company failing to break out, Microsoft decided to take a different tact. Techcrunch reported it this way:
“Today, less than a year later, Microsoft announced that it was feasting on Inflection’s body and sucking the marrow from the bones (though I think they phrased it differently). Co-founders Mustafa Suleyman and Karén Simonyan will go to Microsoft, where the former will head up the newly formed Microsoft AI division, along with “several members” of their team as Microsoft put it — or “most of the staff,” as Bloomberg reports it. Reid Hoffman will stay behind with new CEO Sean White to try to salvage what’s left of the company, which, I feel I have to repeat, raised $1.3 billion dollars nine months ago and $225 million in mid-2022.”
If Microsoft AI seems familiar, that’s because it sounds like the new AI research division that Sam Altman was hired to lead at Microsoft immediately after his brief ouster from OpenAI. Microsoft saw the opportunity in a new leader with Suleyman, who was previously the co-founder of Google’s DeepMind.
The next notch in Microsoft’s empire expansion was followed by a pretty fascinating revelation. The insight came from an excerpt unveiled as part of an ongoing lawsuit against OpenAI. In it, Satya Nadella, the CEO of Microsoft, shared a pretty empire-centric world view:
"If OpenAl disappeared tomorrow, we have all the IP rights and all the capability. We have the people, we have the compute, we have the data, we have everything. We are below them, above them, around them."
Several people have pointed out how much this rhetoric is reminiscent of Microsoft in the 90s under the banner of “embrace, extend, and extinguish.” Satya Nadella may be unlikely to be satisfied with “making Google dance,” but instead be focused on building universal coverage in AI. After missing the boat on search, mobile, and on and on, Microsoft is intent on being the center of gravity in this new technological revolution.
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