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Microsoft outsourcing best AI, Google could end up winning: Okta CEO

Microsoft outsourcing best AI, Google could end up winning: Okta CEO

This photograph shows a screen displaying the logo of Bard AI, a conversational artificial intelligence software application developed by Google, and ChatGPT.

Lionel Bonaventure | Afp | Getty Images

LONDON — Microsoft is handing over the development of all of its best artificial intelligence tools and software to OpenAI, according to one tech CEO — which could be a boon for archrival Google.

Todd McKinnon, CEO of identity security firm Okta, told CNBC on Friday that as Google looks to defend its position in search, it is “probably doing the best job of actually not having to outsource their R&D.”

He noted that the so-called transformers that power today’s generative AI technologies “all came from Google.”

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Transformers are deep-learning models that learn context and thus meaning by tracking relationships in sequential data, such as words.

“This all came from Google, with DeepMind and the research,” McKinnon said. “I mean, the breakthrough was the research from Google, the transformers which are the algorithm that all these LLMs [large language models] are using to make these big advancements.”

Microsoft as an AI ‘consultancy’

McKinnon added that there’s a risk Microsoft’s position in AI becomes reduced to that of a “consultancy.” Microsoft was not immediately available for comment when contacted by CNBC.

It comes as a number of the firm’s top products, such as the firm’s generative AI chatbot CoPilot and PCs equipped with generative AI software, begin to incorporate tech made by OpenAI, the lab behind artificial intelligence chatbot ChatGPT.

Microsoft has plowed billions of dollars into OpenAI, with its total investment to date reportedly swelling to $13 billion. In January 2023, the tech giant said its investment would “accelerate AI breakthroughs to ensure these benefits are broadly shared with the world.”

“It’s so bizarre,” McKinnon told CNBC. “Imagine working at Microsoft. OpenAI is over there making all the exciting stuff. It’s almost like Microsoft is going to turn into a consulting company.”

Still, Google has a mountain to climb if it’s going to achieve commercial success with its own AI investments.

Microsoft has effectively become the leader in the push toward foundation AI models given its investment in and partnership with OpenAI. This has raised concerns that Google’s position in search could be undermined, as internet users increasingly turn to ChatGPT and other AI chatbots for their search needs.

Google’s own AI efforts, meanwhile, have been beset by a number of public blunders.

Last year, when Google unveiled its Gemini AI chatbot, an ad on social media site X showed it giving the wrong answer to a user question. More recently, Google Gemini started creating ahistorical images from prompts about history.

Google subsequently pulled its Gemini image generator tool for pictures of people and has yet to reinstate the product while it investigates a fix.

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