Why is Microsoft Distancing Itself from OpenAI?

Microsoft said ChatGPT risks exposing confidential intellectual property
What is Microsoft Without OpenAI?
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Looks like the honeymoon period for Microsoft and OpenAI is coming to an end. Microsoft seems to be slowly moving away from OpenAI, prioritising its Azure cloud above all else and taking measures to protect its own interests. With a focus on being an enterprise-friendly entity, Microsoft’s growth relies heavily on maintaining the trust of its customers.

Lately, OpenAI hasn’t been in good books putting customers’ data at risk with ChatGPT. Large tech companies like Apple, Spotify, Wells Fargo, Samsung, JP Morgan ,Verizon had wayback ditched ChatGPT and banned  it for their employees from using it. 

Companies like Apple have valid concerns about its employees inadvertently sharing sensitive project details through the system. This data might potentially be viewed by OpenAI moderators. Studies indicate that certain language models can have training data extracted via their chat interface. Apple recently developed its own internal chatbot—nicknamed “Apple GPT” by its employees.

Recently, OpenAI openly introduced GPTbot​, an automated website crawler to collect publicly accessible data to train AI models. This also didn’t help their case either. Microsoft, which relies on OpenAI’s foundational models, to service its customers is taking the hit. 

Microsoft knows that enterprises and their employees need ChatGPT considering the practical value of ChatGPT in enhancing coding and idea generation. Employees have found themselves grappling with a dilemma – whether to utilise ChatGPT or not. Even though their organisations had prohibited its use, some still went ahead and employed it secretly. 

Just recently, Reuters published a report revealing that numerous workers across the U.S. are increasingly relying on ChatGPT for basic tasks, despite concerns that have prompted companies like Microsoft and Google to limit its usage.

To overcome trust issues among the enterprises Microsoft announced Azure ChatGPT recently which is being marketed as ChatGPT for enterprises where they don’t need to worry about their data. Microsoft, while announcing it, surprisingly accepted shortcomings of OpenAI’s ChatGPT

“ChatGPT risks exposing confidential intellectual property. One option is to block corporate access to ChatGPT, but people always find workarounds,” said Microsoft.

Further it said: “ChatGPT on Azure solution accelerator is our enterprise option. This solution provides a similar user experience to ChatGPT but offered as your private ChatGPT.” 

Microsoft also made it clear that customers’ data is “fully isolated from those operated by OpenAI”. Is data not secure with OpenAI and they are exploiting it to train GPT-4? When it released the ChatGPT API in March, the company said OpenAI retains API data for 30 days but no longer uses data sent via the API to improve their models. 

Here with Azure ChatGPT what Microsoft  is doing is that it is taking the OpenAI’s model and putting it behind an endpoint specific to the user’s Azure account. Businesses have been  long interested in GPT-4 and so are asking for private endpoints. Amazon is doing the same with Bedrock.

Azure’s the only hope 

Currently, Microsoft is on high with its Azure performance which saw 26% revenue growth due to generative AI initiatives it took by partnering with OpenAI and now it doesn’t want it to go down just because OpenAI as a brand isn’t trustworthy. 

When Microsoft partnered with OpenAI, Microsoft deployed OpenAI technology through API and the Azure OpenAI Service—enabling enterprise and developers to build on top of GPT, DALL·E, and Codex. They also worked together to build OpenAI’s technology into apps like GitHub Copilot and Microsoft Designer.

​​However, one of the common doubts that rose among customers was: If data is submitted to the Azure OpenAI Service, does the data always remain within Microsoft Azure or is it passed to OpenAI at any time? Microsoft claimed that the data submitted to the Azure OpenAI Service remains within Microsoft Azure and is not passed to OpenAI for model predictions and Azure has sole control and governance of the data and OpenAI.

Microsoft owns enough of OpenAI that their endgame goal of putting GPT like features into Azure and Office365 for enterprise customers is what we’re likely to see happen. In one of the interesting conversations on HN, a user said OpenAI targets private consumers while Microsoft focuses on enterprise. 

He also gave an example of his own company. “I can use my own organisation as an example. We’re an investment bank that does green energy within the EU. We would absolutely use GPT if it was legal, but it isn’t, and it likely never will be considering their finance model is partly to steal as much data as they can.” 

Microsoft is concerned about the current negative perception of OpenAI’s data security for enterprises. Through the introduction of Azure ChatGPT, they are striving to rebuild trust among enterprises and attract more customers. They don’t want to associate themselves with OpenAI’s name on Azure, that’s why they have put Azure’s name at forefront. 

Azure ChatGPT is just part of Microsoft’s overall strategy for total IT domination in enterprise Also, it isn’t the first time Microsoft is at crossroads with OpenAI. Earlier WSJ had reported that people within Microsoft have complained about diminished spending on its in-house AI and that OpenAI doesn’t allow most Microsoft employees access to the inner workings of its technology.

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Siddharth Jindal
Siddharth is a media graduate who loves to explore tech through journalism and putting forward ideas worth pondering about in the era of artificial intelligence.

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