OpenAI shifts to Google for cloud computing support as Microsoft partnership falters, despite Sam Altman's "compute-sufficient" claim

In a surprising turn of events, OpenAI is reportedly turning to Google for additional computing support. This signals that the ChatGPT maker is reaching new heights in the AI landscape, requiring an exorbitant amount of computing power.

According to Reuters, the deal has been under discussion over the past few months but was concluded in May. It's quite interesting to see OpenAI partner with Google for its computing needs, especially despite its long-standing rivalry to the software giant in the AI landscape.

All factors withstanding, Google gets to have its cake and eat it if this deal pulls through. The tech giant will get to make a profit from the cloud deal with OpenAI while simultaneously competing with the firm in the AI race.

While speaking to Reuters, Scotiabank analysts indicated that the cloud deal between OpenAI and Google was "somewhat surprising:"

"The deal ... underscores the fact that the two are willing to overlook heavy competition between them to meet the massive computing demands. Ultimately, we view this as a big win for Google’s cloud unit, but ... there are continued worries that ChatGPT is becoming an incrementally larger threat to Google’s search dominance."

But Sam Altman claimed OpenAI was no longer compute-constrained...?

Interestingly, OpenAI CEO Sam Altman unveiled its $500 billion Stargate project earlier this year designed to facilitate the construction of the data centers across the United States for its sophisticated AI advances.

The news hit the tech world by storm, with leaders like Salesforce's CEO Marc Benioff predicting that Microsoft won't use OpenAI's tech in the future. Consequently, Microsoft lost its exclusive cloud partner status with OpenAI, but still retained the right of refusal.

OpenAI has seemingly cozied up with SoftBank, which recently helped raise $40 billion in the AI firm's latest round of funding, pushing its market capitalization to $300 billion. Unfortunately, it might have buried itself in debt in the process.

Microsoft's multi-billion dollar partnership with OpenAI is seemingly fraying, especially after a report emerged claiming that the tech giant had bailed out of two mega data center deals because it no longer wanted to provide additional support for ChatGPT training.

Interestingly, Sam Altman claimed that OpenAI was no longer compute-constrained, potential responding to Microsoft's blow and an assurance that its able to facilitate its AI advances.

Microsoft and OpenAI have been in a scuffle over the past few months with the former claiming that GPT-4 is too slow and expensive to meet customer demands. The latter claimed that Microsoft's computing power wasn't sufficient, loosening its grasp on the AGI benchmark to its rivals.

As such, Microsoft's AI CEO Mustafa Suleyman revealed that the tech giant is developing its own frontier AI models, which might be 3 to 6 months behind OpenAI. The executive indicated that the tech giant's strategy was to play a tight second at an affordable cost. Microsoft is also testing third-party AI models in Copilot, potentially emancipating itself from an overreliance on OpenAI.

But at the end of the day, Microsoft CEO Satya Nadella indicated that the tech giant makes money from every ChatGPT use. "Every day that ChatGPT succeeds is a fantastic day."