In an industry numb to eye-watering AI bets, it takes a lot to make a chief executive hesitate. So Nvidia’s Jensen Huang blinking at one such commitment to OpenAI is worthy of notice. According to the Wall Street Journal, the chief executive officer of Nvidia Corp. has been telling industry associates that his $100 billion investment in the ChatGPT maker announced last year was actually nonbinding. He also reportedly privately criticized the company’s lack of business discipline.
It now looks as though Huang’s planned investment, originally tied to an infrastructure build-out,1 will manifest as a smaller bet in the tens of billions as part of OpenAI’s current fundraising efforts ahead of a potential initial public offering. (OpenAI is said to be in discussions with Nvidia, Microsoft Corp. and Amazon.com Inc. to raise roughly $100 billion in capital, separate from the proposed infrastructure deal with Nvidia).
Huang denies he’s unhappy with OpenAI. “We will invest a great deal of money,” he told reporters on Saturday. But he’s right to hedge his bets.
For all the outward charm, Chief Executive Officer Sam Altman’s management of OpenAI has been unsettling. There was his dramatic firing in late 2023, followed by a stream of complex, eye-popping deals that put his company on the hook for $1.4 trillion in computing commitments, 100 times more than OpenAI’s projected 2025 revenue. The company’s product rollouts have been frantic: Efforts to build a developer marketplace with the GPT Store and custom GPTs fizzled after lacking a clear strategy, for instance.
But OpenAI is not alone in struggling to execute. So too is Microsoft. The stable software giant, whose stock has nearly doubled since the launch of ChatGPT, got a steal with its early, $13 billion bet on OpenAI, which now translates to a 27% stake valued at $135 billion — or more than ten times its original investment. Thanks to a restructuring deal announced last October, Microsoft has exclusive access to OpenAI’s intellectual property and models through 2032, cleaner agreements than before.
Microsoft, however, is failing to capitalize on that coveted access. For all of Altman’s questionable business acumen, he is still managing to churn out some of the world’s most powerful artificial-intelligence models. So why does Microsoft’s flagship AI tool Copilot, which has the seeming advantage of being underpinned by OpenAI’s technology, lag the competition?
Last month, Anthropic launched Claude Cowork, an app it built in 10 days with its own AI coding tool. It's remarkable. With permission, it could operate my personal computer, organize files, generate PowerPoint decks and Excel spreadsheets from my documents and reply to LinkedIn messages.
Microsoft Copilot cannot do any of this, despite Microsoft owning Windows, Office and LinkedIn. Users have instead complained that Copilot is confusing, constrained and hard to use, underscoring a perplexing gap between the high quality of OpenAI’s models and Microsoft’s seeming inability to turn them into useful products.
Something is wrong with Microsoft’s internal research efforts. The company has invested heavily in building its own AI models in an attempt to broaden its strategy beyond OpenAI. But that effort looks misguided and some industry watchers are now waiting to see what happens to the leadership of Microsoft’s AI program, says David Rainville, lead manager of Sycomore Sustainable Tech, which has invested in the software giant and bought into the company’s share rout last Thursday.
If the company doesn’t release an equivalent to Claude Cowork in the next six months, heads will have to roll, Rainville adds. “There’s definitely been a disconnect between the quality of models and what Microsoft has been able to execute on.”
Some blame for that can also be flicked back at OpenAI, which has resisted sharing full technical details of its models — to the frustration of Microsoft executives. Rainville says that Copilot is already “drastically better” since Microsoft in August 2025 plugged it into OpenAI’s latest GPT-5 model — but it needs to be able to carry out tasks on a computer to keep up with competitors like Anthropic and OpenClaw.
The next few years will likely put Microsoft at a crossroads. Should OpenAI’s financing efforts falter, it could be absorbed into a larger entity — perhaps Microsoft. To make the most of that possibility and the access it has today, the software giant should capitalize on its partnership, however tense it may be. Jensen Huang’s hesitation should be taken as a warning: Microsoft needs to turn its privileged access into better products. With AI models becoming increasingly commoditized, the race is now about execution, and Microsoft risks being left behind.
1 The plan, announced in September 2025, was part of a strategic partnership to build out massive AI computing infrastructure, specifically at least 10 gigawatts of data-center capacity with Nvidia hardware, with Nvidia’s investing up to $100 billion as that capacity came online.
A message from Advisor Perspectives and VettaFi: Discover something new! Click here to register for our upcoming webcasts.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
Read more articles by Parmy Olson
