Microsoft and OpenAI Drift Apart | Satya Nadella–Altman Alliance Faces Strain

Once hailed as the “best partnership in tech,” the relationship between Microsoft CEO Satya Nadella and OpenAI CEO Sam Altman has cooled noticeably in recent months. According to a recent Wall Street Journal report, the two leaders—who were once in constant contact via multiple daily texts—now connect through a single scheduled call each week.

The shift reflects deeper strategic and philosophical differences between the companies, which were once tightly aligned in building cutting-edge AI systems. Insiders say tensions have been brewing ever since Altman’s brief ouster from OpenAI in late 2023—a turning point that led Satya Nadella to hedge Microsoft’s position in the AI space.

The Microsoft-OpenAI partnership was instrumental in accelerating the generative AI boom, with Microsoft investing billions and integrating OpenAI’s models into its Azure cloud services and products like Copilot. At the height of their collaboration, Altman reportedly used his close rapport with Satya Nadella to break internal deadlocks, even posting screenshots of their conversations to Slack channels to push decisions through.

Post-Ouster Fallout and Inflection’s $650M Twist

Altman’s surprise firing from OpenAI—and subsequent reinstatement—left a lasting impact. Satya Nadella, wary of future instability, responded by investing $650 million to acquire Mustafa Suleyman’s team from Inflection AI. This move gave Microsoft its own team to build foundational models, signaling a move toward AI independence.

This acquisition was interpreted by many as a vote of no confidence in OpenAI’s internal governance and a step away from relying solely on Altman’s vision.

Conflicts Over Code, Models, and AGI

Beyond leadership tensions, the companies are now clashing over technical and strategic decisions. OpenAI has been slow in sharing the code behind its powerful reasoning model, causing frustration within Microsoft. Meanwhile, Microsoft has expressed skepticism about OpenAI’s ambitious claims of nearing artificial general intelligence (AGI)—another divergence that has added strain to the partnership.

The friction escalated publicly in January 2025, when Altman unveiled the Stargate initiative—a massive AI data center project backed by Oracle and SoftBank. The project bore a strong resemblance to plans Altman once discussed with Microsoft, yet Satya Satya Nadella was notably absent from the announcement, attending the World Economic Forum in Davos instead.

Despite the cooling of personal ties, Microsoft and OpenAI remain deeply interconnected. Microsoft holds a non-voting board seat at OpenAI and has contractual leverage that could block key restructuring plans, including any attempt by OpenAI to shift fully into a for-profit entity. Conversely, OpenAI retains the right to limit Microsoft’s access to its most advanced models.

With both companies pursuing increasingly separate paths in AI development, industry observers are watching closely to see whether their cooperation can survive the growing divergence in strategy—and personality.

For now, the daily texts have stopped. And what was once a hallmark of tech camaraderie has become just another weekly call on the calendar.