'Google Should Have Been The Default Winner' In The AI War Against Microsoft

Satya Nadella
CEO of Microsoft

If there is anything a CEO of a large publicly-traded company cannot do, is blatantly lie about something. While they may cover their flaws in one way or another, if a rival is stronger, they may as well as admit to that fact.

But as a CEO of a well-known company with far too many product to count, one that wishes to praise a rival should do so in good manners, with careful consideration and proper strategy.

Satya Nadella is the CEO of Microsoft, the tech titan that has been around far longer than most other modern tech titans.

And here, the executive said that Google should have been a default winner in the AI space.

In the podcast In Good Company hosted by the CEO of Norway’s Norges Bank Investment Management, Nicolai Tangen, the Microsoft chief acknowledged that its rival, Google, is a very strong player in the AI industry.

Satya Nadella.
Satya Nadella.
"Google's a very competent company and obviously they have both the talent and the compute. They're the vertically integrated player in this. They have everything from data to silicon to models to products and distribution."

"We will have significant amount of competition, and if anything Microsoft's partnership with Open AI is bringing more competition. Google should have been the default winner. If we partner well and we innovate well, we can bring some competition to them."

Nadella stressed that Microsoft had been working with AI for a very long time.

"The very first thing Microsoft Research did in 1995 when it was formed was some stuff around speech. I think we hired a bunch of the folks from CMU and so we've been at this AI thing in its variety of different forms forever," he said.

Microsoft decided to partner with Sam Altman’s OpenAI because the ChatGPT creator was using a different approach in the field.

And Microsoft's partnership with OpenAI, which has only increased from mere $1 billion to $10 billion, only brings a competition to Google in the generative AI business, something that Microsoft cannot do otherwise.

Alone, Google is at least one step ahead of Microsoft.

Microsoft and OpenAI's partnership only helped intensify competition.

"I'm always looking for partners that we can innovate with and that's what I found in Sam and team. At that time, it was a real shot in the dark. It is not like this is a sure thing. This is the issue with tech, which is long before it's conventional wisdom you have to be all in and hope it works."

"We backed it long before it was conventional wisdom and here we are. But there's going to be severe amount of competition (with Google)."

Nadella admitted this after Microsoft told EU antitrust regulators, underscoring the rivalry between the two tech giants.

Microsoft said that the Alphabet unit Google is enjoying a competitive edge in generative AI due to its trove of data and AI-optimized chips.

"Today, only one company - Google - is vertically integrated in a manner that provides it with strength and independence at every AI layer from chips to a thriving mobile app store. Everyone else must rely on partnerships to innovate and compete," Microsoft said in its report to the Commission, adding that, "YouTube provides an unparalleled set of video content; it hosts an estimated 14 billion videos. Google has access to such content; but other AI developers do not."

So here, Nadella is simply praising its rival, to then hit it back.

As companies, Microsoft needs to obey the rules in regions it wishes to conduct business, and in the face of the EU Commission, Nadella is playing it safe.