Yesterday, Microsoft CEO Satya Nadella took the stand in US District Court in Oakland, California, where he testified about his relationship with Elon Musk, Microsoft's partnership with OpenAI, and more. The executive indicated that he has never received a clear explanation from the company's board of directors why Sam Altman was briefly ousted as OpenAI CEO.

At the time, reports emerged suggesting that Satya Nadella was blindsided by the move. He further revealed that he wasn't told about the decision to fire Altman in advance, and was only pulled out of a meeting and informed about the ouster after the fact.

The board members had revealed that Altman wasn’t consistently candid with his leadership, operations, and efforts (via CNBC). However, Satya Nadella dismissed these claims, suggesting that there was more than meets the eye, further indicating that “[t]here may have been some jealousy … coming through.” — “It was sort of amateur city, as far as I’m concerned,” Nadella added.

Elon Musk has accused OpenAI, Sam Altman, and Greg Brockman of defrauding him out of billions of dollars that he invested in OpenAI using a fake humanitarian mission. He also added Microsoft to the fold, claiming that the tech giant helped Altman and Brockman defraud him.

Interestingly, Nadella testified that Elon Musk never reached out about issues with Microsoft's deal with OpenAI, although they have each other's phone numbers. He even showed the jurors an email Musk had sent him, thanking him for financial and computing support for OpenAI in 2016: "Very much appreciated," Musk indicated in the email. "Will make sure that people know about Microsoft's help."

Satya Nadella indicated that Elon Musk didn't raise any issues when the company initially made a $1 billion investment in OpenAI in 2019. Similarly, he remained quiet when the news broke that Microsoft's investment stake in OpenAI had risen to $10 billion.

Nadella indicated that he was “very proud” that Microsoft took the risk to invest in OpenAI when “no one else was willing” to bet on the ever-evolving technology and OpenAI. The Microsoft executive further revealed that the company took a $15 million loss by letting OpenAI use Azure at a discount to power ChatGPT.

With this in mind, Nadella's testimony in the ongoing Musk v. Altman trial, the billionaire only began complaining about Microsoft and OpenAI's partnership after he filed the 2024 lawsuit. This also seemingly supports the theory and speculation that Musk is a sore loser, as he tries to compete against ChatGPT with Grok.

Nadella was also questioned about his "It wouldn't matter if OpenAI disappeared tomorrow" remark amid tension between Microsoft and OpenAI. "We have the data, IP rights, and all the capability." —"We are below them, above them, around them," Nadella added.

The statement was viewed as "a new war slogan" by some of the executive's fans. While this might be used by Musk's legal team to support his premise about donating $38 million to a charitable cause, only for OpenAI to evolve into a for-profit venture, abandoning its founding mission.

While on the stand, Nadella indicated that he used the statement to calm concerns about Altman's sudden ouster as CEO. "It goes back to me trying to communicate as clearly as possible to customers that they can count on us," Nadella indicated, suggesting that Copilot and other OpenAI products would continue, regardless of OpenAI's situation. We'll see.

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Microsoft's multi-billion-dollar partnership with OpenAI remains fragmented. In the most recent development, the ChatGPT maker ended its exclusive partnership with Microsoft, marking a new trajectory for both companies.

For instance, Microsoft will no longer need to pay a revenue share to OpenAI. While the tech giant remains OpenAI’s primary cloud partner and its products will ship on Azure first, the AI firm can still provide all its products to customers across any cloud provider if it fails or chooses not to support the necessary capabilities.

Microsoft has heavily injected generative AI technologies across its entire tech portfolio, including Windows 11 with Copilot as the star of the show. This all happened despite market analysts and experts sounding an alarm that investor interest in the ever-evolving technology is waning, especially because big tech has failed to establish a clear path to profitability.

In March, analysts speculated that Microsoft was on the verge of closing its worst quarter since the 2008 financial crisis. However, the tech giant isn't giving up on its AI ambitions, as it plans to invest $146 billion in infrastructure in 2026.

Multiple reports have suggested that Microsoft is facing internal struggles meeting its AI struggles, which has forced it to make cuts in its sales department. They further elaborated that the root cause of this issue is that nobody wants to use the company's AI products.

During the company's latest quarterly earnings call, Microsoft CEO Satya Nadella was singing a different tune — indicating that Microsoft 365 Copilot now has 20 million paid enterprise Copilot seats. The executive further indicated that users are actually engaging with the tool as much as they do with email.

According to Nadella: “Copilot queries per user were up nearly 20% quarter-over-quarter. To put this momentum in perspective, weekly engagement is now at the same level as Outlook,” he said. “This is like a daily habit of intense usage.”

This contrasts with a separate report from earlier this year that suggested only 3.3% of Microsoft 365 and Office 365 users who interact with Copilot actually pay for it. That said, Microsoft's new non-exclusive deal with OpenAI could leave Copilot AI in a difficult position in Windows 11.

Where does Microsoft's non-exclusive agreement with OpenAI leave Copilot in Windows 11?

“You now have access in chat to multiple models by default, with intelligent auto routing in agents with critique and counsel," Nadella said, while explaining that Copilot is not dependent on one model. "You can use multiple models together to generate optimal responses.”

While Copilot isn’t entirely reliant on OpenAI’s models, it closely resembles ChatGPT. Both are nearly at feature parity and share the same underlying technology for image generation and more.

One of the major complaints at Microsoft's AI division by users is that Copilot isn't as good as ChatGPT. However, the company quickly dismissed the claims, shifting blame to a lack of prompt engineering skills.

Last year, Microsoft Teams lead Jeff Taper admitted that Copilot and ChatGPT are practically the same thing, but the former sports better security and a more powerful user experience.

But will things remain the same even after Microsoft's new non-exclusive deal with OpenAI? The deal dictates that the tech giant will continue to have a license to OpenAI IP for models and products through 2032. However, the license is now non-exclusive.

While Microsoft Copilot in Windows 11 will still be powered by OpenAI's technologies, clearing any doubts about service disruptions, the non-exclusive license means the tech giant has instantly lost its bargaining chip in the ever-evolving AI landscape — privileged access.

As such, OpenAI can license its models to rival companies like Google, Amazon, and even Apple, which means Copilot won't be the only product with a direct OpenAI integration, seemingly costing Microsoft its unique selling point.

Microsoft remains uniquely positioned to weather this storm thanks to its massive Windows, Office, and Azure server platforms. By embedding AI early across its tech stack, the company leveraged an already-secured market to drive adoption of new AI offerings — an advantage that competitors may struggle to replicate.

Microsoft is developing in-house AI models in the interim

Right now, it doesn't seem far-fetched that Microsoft and OpenAI could potentially sever their ties in the future. Even Salesforce CEO Marc Benioff made a similar prediction after OpenAI announced its now-cancelled $500 billion Stargate project. And it seems like Microsoft is aware.

Over the past few months, Microsoft has made several strategic moves to secure its position in the AI landscape, including reshuffling its Copilot leadership. Former Snap Senior VP Jacob Andreou now leads Copilot experiences, both consumer and commercial, as an executive vice president reporting to Microsoft CEO Satya Nadella, while Microsoft AI CEO Mustafa Suleyman will shift focus to developing frontier AI models for the company.

Last year, Microsoft started developing its own in-house AI models and testing third-party ones for Copilot, potentially freeing itself from an overdependence on OpenAI for its AI efforts. However, Mustafa Suleyman confirmed that the company is developing "off-frontier" AI models, but admitted that they'd play a close second to OpenAI's sophisticated technology.

More recently, Microsoft has put elaborate measures in place to improve the general user sentiment about Windows 11 by addressing major pain points across the OS, including reducing where Copilot integrations appear.

But Microsoft isn't pulling the plug on AI in Windows 11 entirely. The company recently added support for AI agents on the Taskbar, Xbox mode, and other notable features.

It'll be interesting to see where Copilot AI in Windows 11 ends up, especially as Microsoft's partnership with OpenAI continues to evolve.

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Right now, most conversations around advances in generative AI are almost always compared to how it performs against humans. With AGI (artificial general intelligence) as the icing on the cake for top research labs, it makes sense. Besides, the buzzword describes a sophisticated AI system that surpasses human cognitive capabilities.

AI models are quite impressive — they can already write code (though human oversight and intervention is encouraged) and you can also leverage tools like ChatGPT Health to seek medical and wellness advice.

But there's also so much that AI can't do. For instance, AI sleuth and TikTok user @huskistaken shared a now viral video on the platform asking ChatGPT voice model to time him running a mile. However, he quickly established that the AI-powered chatbot opted to make up a time rather than tracking it (via Gizmodo)

Husk confronted the tool about it being less-then-truthful about tracking his run, but it insisted that it actually followed his prompt.

Interestingly, OpenAI CEO Sam Altman addressed the issue while appearing at the on the show Mostly Human to talk about the future of AI, his company, and humanity. While speaking to the host, Laurie Segall, Altman was asked to react to the viral video about ChatGPT lying about tracking time and presenting it as the gospel truth to the user.

The executive laughed at the video, but it also seemed that he found it a tad cringe. Altman quickly indicated that it was a "known issue" when Segall asked him if he'd present the video to his product team for potential resolution.

Sam Altman admitted that ChatGPT's voice model doesn't have the capability of starting a time or even keeping track of time. “Maybe another year before something like that works well,” added Altman. “But we will add the intelligence into the voice models.”

To take things a notch higher, Husk asked ChatGPT if it could actually track time. The chatbot got a bit snarky, indicating that it's “just a basic part of what I can do.”

The AI sleuth proceeded to play the clip of Altman indicating that ChatGPT can't track time. However, the AI model seemingly dismissed Altman, claiming, “What he’s saying is that some voice models might not have all the capabilities, but I do.” It insisted that “I definitely have a time capability” when pressured to admit that it can't keep track of time.

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OpenAI is arguably the most sought-after AI research lab, which could primarily be attributed to its early investment in the technology, coupled with the broad popularity of its ChatGPT offering.

However, recent reports suggest that the AI firm could make a $14 billion loss in 2026, primarily driven by infrastructure expansion, model training, research hiring, and compute costs. Market analysts and experts predict that this could potentially set up the company for bankruptcy by mid-next year.

While CNBC reported that OpenAI's internal targets are slightly higher at $280 billion in annual revenue, Reuters' Karen Kwok says "OpenAI would have to build a business the size of today's Microsoft in just four years" to succeed. That would certainly take some doing. OpenAI will need to maintain rapid growth, generating up to $250 billion in annual revenue by 2030.

Last year, we learned that OpenAI is reportedly laying down the groundwork for what could be one of the largest IPOs in history, with a potential valuation of around $1 trillion. The report further detailed that the ChatGPT maker could be getting ready to go public and even file with regulators in the second half of 2026.

It's worth noting that OpenAI generates approximately $13 billion in annual revenue from ChatGPT and LLM access fees. For context, 70% of this money comes from users paying for a subscription plan to talk to AI. Despite ChatGPT's vast popularity and adoption, only a small percentage of users actually pay for the service.

This means that OpenAI has less than 5 years to convert its $13 billion annual revenue to $1 trillion. It's unclear whether the injection of ads into ChatGPT's user experience will help bridge this gap.

However, CEO Sam Altman says OpenAI’s revenue is “growing steeply,” noting strong demand across its consumer and enterprise businesses, including ChatGPT and upcoming hardware. He further projects the company’s revenue could soar to $100 billion by 2027.

💬 Will OpenAI be able to grow its annual revenue?

It's no secret that Microsoft's partnership with OpenAI is encountering some turbulence. Microsoft was curiously absent from OpenAI’s latest funding round, which raised $110 billion and boosted the company’s market capitalization to about $730 billion.

However, Microsoft cleared the air, indicating that "nothing about today’s announcements in any way changes the terms of the Microsoft and OpenAI relationship."

OpenAI’s controversial deal with the Pentagon to use its AI technology and ChatGPT for mass surveillance of American citizens and autonomous weapons systems sparked backlash from users, turning the company into a target for cancel culture.

The hashtags “Cancel ChatGPT” and “QuitGPT” quickly became viral, leading to ChatGPT uninstall rates spiking by nearly 300%. Altman admitted that the deal was "opportunistic and sloppy" while highlighting OpenAI's plan to amend parts of the contract, adding new language to reinforce its principles on sensitive issues such as surveillance.

But it might be a tad too late to save face. A new report claims that approximately 2,500,000 people have stopped using ChatGPT as part of the “Cancel ChatGPT” movement, which is gaining more traction (via artificial intelligenceee).

Unless OpenAI can reverse this trend, moving from $13 billion in annual revenue to Microsoft’s scale will be a steep challenge, especially since ChatGPT remains its primary revenue driver.

Do you think OpenAI could achieve a $1 trillion IPO valuation with the QuitGPT trend growing stronger? Share your thoughts with me in the comments.

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Elon Musk has reportedly tried to buy OpenAI, according to a new report. And just as quickly as that report emerged, OpenAI CEO Sam Altman has seemingly already rejected the bid.

Elon Musk and Sam Altman of OpenAI have a bit of an "open" rivalry. Musk is currently in the process of suing OpenAI for straying from its non-profit research-oriented roots, as Altman in partnership with Microsoft has gradually taken the company in a more profit-first direction. As such, OpenAI is separated into two entities, one continuing to operate as a non-profit, while its for-profit arm is on the hook to the tune of billions in partnerships with Microsoft and other investors. Indeed, the last funding round OpenAI valued the company at roughly $157 billion.

Various companies are desperately vying for the top spot in the space right now, with Google Gemini, Meta's Llama, and players from China like DeepSeek constantly shaking up the space. OpenAI generally remains the forerunner, though, which integrates with Microsoft Copilot, led by ChatGPT.

Elon Musk's own xAI, powered by chatbot Grok, seeks to dethrone OpenAI with its own models. Elon Musk has been particularly aggressive in his pursuit of OpenAI's crown, owing to previous history with Sam Altman. Indeed, Musk co-founded OpenAI back in 2015, but left the company citing conflicts with Tesla's early AI efforts. There have been suggestions from OpenAI's legal team that the real reason Musk left revolved around a rejection of him gaining more control of the company.

As Microsoft knows, if you can't beat 'em organically, beat 'em inorganically, and that's reportedly what Musk has attempted to do. An unsolicited bid of $97.4 billion to purchase OpenAI's non-profit arm came through earlier today, reported by WSJ. The consortium of unnamed investors led by Musk might have already been rejected, though.

In a post on X (Twitter), Altman jokingly offered to buy X for $9.74 billion, with a cheeky "no thanks." Musk replied by calling him a "swindler."

Musk has also been critical of Sam Altman's $500 billion "Stargate" project. Backed by President Trump, Stargate would see OpenAI lead the construction of an absolutely gargantuan server array to power future generations of artificial intelligence. Trump's move to support Sam Altman and OpenAI could be considered fairly surprising, given how close Musk is to the current United States administration.

RELATED: Microsoft CEO weighs in on OpenAI's Stargate project

Trump has hailed the Stargate project in previous comments, calling it a "resounding declaration of confidence in America's potential." Trump suggested the rivalry between Altman and Musk was incidental, shrugging off reporters by saying "[Musk] hates one of the people on the deal," most likely referring to Altman.

Competition in the AI space is driving innovation at a breakneck pace. DeepSeek out of China wiped billions of dollars off of AI stocks recently, with reports that it could mirror ChatGPT at a fraction of the cost. Although, OpenAI's Deep Research project once again seems to have one-upped its rivals in response, as it rapidly tries to close in on next-gen AGI tech, which would give AI models the ability to potentially understand context, rather than simply mimic it.